Environmental impact from returned goods

Sharon Cullinane and her colleague Michael Browne have studied the energy use and environmental impact that arise when consumers return clothing they have purchased online. “We selected the fashion industry because of the high number of returns, many of them cross-border. The average rate of returns in Sweden turned out to be 22 per cent, but the range is large, varying from 18 per cent to 60 per cent depending on the segment. For example, young people return more clothes than older people, and women more than men, and high fashion items are returned more than basic fashion” says Sharon Cullinane.

E-commerce is increasing rapidly. But so is the number of returned goods. In the fashion industry, the proportion of returns is particularly high, with a substantial negative environmental impact as a result.

Over-order has become the norm A new pattern in consumer behaviour has become discernible with the advent of e-commerce: customers tend to systematically over-order. To find the right size or perfect colour, they order many more items than they intend to keep, returning all but one or two.

“One of the reasons that returns are so popular with customers is that the process itself is a ‘big black box’ – people don’t know what the return entails, the cost is hidden. Consumers tend to think about the benefits, not the consequences of their behaviour. It’s hard for people to imagine that their items travel for maybe thousands of kilometres before going back to sale”, says Sharon Cullinane.

The most prolific returners also tend to be the companies’ best customers, and no one wants to risk losing market share to competitors by being the first to charge for returns.

In the end we have to pay a little bit more Sharon Cullinane has identified three actors that need to act to reduce the negative climate impact: “First of all, customers need to understand how much returns affect the environment and behave more responsibly. Secondly, retailers can do a number of things to handle returns more efficiently. They also have a responsibility to not encourage consumers to return items. Thirdly, carriers have to both improve their efficiency and switch to warehouses and transports with less impact on the environment”, says Sharon Cullinane. “Another interesting solution is linked to the growing trend of sharing economy. Returns might be sent directly to another customer. There is also a development of digital tools that can help customers make better choices when shopping,” says Sharon Cullinane But in the long run, Sharon Cullinane thinks it is inevitable that we have to start to cover the true cost of returns.

“We’re all guilty of wanting to buy things as cheaply as possible. It’s natural, isn’t it? But we must be ready to pay a bit more for products in the future.”

SHARON CULLINANE Professor of sustainable logistics. Did her PhD on heavy lorries in the UK in 1987. Has worked in Egypt, France and Hong Kong. Came to the School of Business, Economics and Law in 2015.

One Sunday morning, Martin Ärnlöv spots a job ad. Shortly after, he leaves his top job in the business world, halves his salary and goes over to the ‘soft side’. 15 years later, he is Secretary General of the Swedish Red Cross and pleased to be making a difference in his job every day.

MARTIN ÄRNLÖV Secretary General of the Swedish Red Cross. Graduated from the School in 1988. Started his career at SKF. CFO at Akzo Nobel and CEO of Bracke Diakonia before he was headhunted to the Swedish Red Cross at the end of 2017.

I CAN’T IMAGINE A MORE MEANINGFUL JOB

Growing up in Alingsås, Martin Ärnlöv was a bundle of energy. Alongside his studies on the Business and Economics programme at the School of Business, Economics and Law, he read Political Science and took on extra work as a freelance journalist. He was interested in social issues.

“I wrote a letter to Amnesty’s Secretary General Thomas Hammarberg, who was an alumnus of the Stockholm School of Economics, and asked him how he had got his job. He answered that I should make sure I learn a job thoroughly and keep up my social engagement,” says Martin Ärnlöv.

A job with many dimensions After graduation and a short career at SKF in Gothenburg, he was headhunted for chemicals giant Akzo Nobel, where he advanced to international level management. But with three small children and many discussions with his wife Tove about work-life balance, Martin Ärnlöv felt it was time to change track. He wanted to make a difference. And then he saw the job ad stating that the Bräcke Diakoni foundation, a non-profit healthcare provider, was looking for a business-oriented Finance Manager.

“It was a job that spoke to every part of me, a role that reflected both the social and the business dimension. It was exactly what I had been missing,” says Martin Ärnlöv.

Deep understanding of the operation Eventually he was appointed CEO of the foundation, leading an organisation through a period of strong growth. By the time of his departure in 2018, Bräcke Diakoni was operating in 16 municipalities, had gone from 300 to 1,200 employees and had increased its turnover from SEK 130 million to SEK 800 million. But Martin Ärnlöv was careful to maintain a deep understanding of the organisation and what it did. “I usually work a few full days out in the organisation each year. At Bräcke Diakoni I changed my work clothes and took a few shifts at the elderly care unit and at the rehab centre, not as some sort of undercover boss, but to really understand what we do,” says Martin Ärnlöv.

Experience from two worlds When the Swedish Red Cross was looking for a new Secretary General, Martin Ärnlöv, with his experience from two different worlds, was the ideal choice. With one year under his belt, he is both inspired and humbled.

“It’s an incredibly stimulating organisation to be involved with and I can’t imagine a more meaningful job. But it’s also something I need to keep an eye on. In the world of NGOs, people invest their own self in a shared idea. This provides deep motivation and can give an enormous boost, but there is also a risk that people will lose perspective and burn out, so it’s important to practise balanced leadership,” says Martin Ärnlöv.

Many challenges ahead His new employer is one of Sweden’s most important civil society organisations, with responsibility for acting both in Sweden and internationally. Over the course of his first year, Martin Ärnlöv’s work has taken him to refugee camps in some of the world’s most vulnerable areas.

“Things are tough on the world stage, with long drawnout conflicts that cause people to become stuck in refugee camps. It’s also a tough time in Sweden, where we have a level of social segregation that is leading to a more polarised society. And then we’re facing the enormous challenges of climate change. I see the Red Cross as an important actor that can make a difference by gathering resources and guaranteeing that help gets through,” concludes Martin Ärnlöv.

Collaboration is a factor for success

It is easy to become stuck in the rut of everyday life. But don’t forget to stay open to new opportunities and to network, even with competitors. This is visiting professor Sylvie Chetty’s advice to Swedish entrepreneurs who want to get out into the world.

FOCUS ON ENTREPRENEURS KEEN TO GET OUT INTO THE WORLD

The School of Business, Economics and Law’s new visiting professor Sylvie Chetty researches international trade with a focus on networks and the internationalisation of entrepreneurial businesses. She sees similarities and differences between Sweden and her homeland of New Zealand.

“Both countries are small, open economies that have to be able to compete internationally. Collaboration is a factor for success, but New Zealand doesn’t really have the strong culture of cooperation that Sweden has. In one project, I studied the many boatbuilders that are clustered in Auckland. Initially, they saw each other as competitors, but the New Zealand Export Council got them to work together to strengthen their international competitiveness. As they gradually chose to specialise in different areas, such as sails, hulls and winches, they developed their products and achieved success in the global market,” says Sylvie Chetty.

Make the most of the resources you have and dare to improvise Business students are often told how important it is to set goals and make plans when starting up a company. But there are alternative decision-making models, one of which is effectuation.

“Entrepreneurs can’t always begin by setting goals. If you only have a hundred dollars, you have to get out and meet people, see who is interested in your business concept, maybe try crowdfunding. It’s about improvisation, creativity and making the most of the resources you have,” explains Sylvie Chetty. In a new research project at the School, Sylvie Chetty is looking at the role that the pace of innovation may play. There are early indications that companies with a rapid pace of innovation also have faster internationalisation processes. “Innovative start-ups sometimes have to get their new product out quickly in order not to lose ground. If you’re too slow, the world will move on without you. Our results so far show that companies with the capacity to maintain a high pace of innovation and also the courage to take risks and be proactive can achieve commercial advantages,” says Sylvie Chetty.

Gothenburg – an elegant and warm city As a new visiting professor at the School of Business, Economics and Law, Sylvie Chetty will spend the next three years working with the Centre for International Business Studies, part of the Department of Business Administration, on projects such as the internationalisation of Nordic companies in the field of digital health. Sylvie Chetty also teaches on the Master’s programme International Business and Trade.

She has been pleasantly surprised by her new surroundings. “Gothenburg is a lovely, elegant city and the archipelago has a movie-like beauty,” says Sylvie Chetty. She would very much like to create long-term research collaborations and deepen her understanding of Swedish businesses, particularly with regard to our entrepreneurs.

“There are many large, multinational companies in Sweden, something that we don’t have in New Zealand, but I’m more interested in the smaller companies, the ones that could potentially grow to become the next IKEA,” concludes Sylvie Chetty.

VISITING PROFESSOR PROGRAMME Through their experience and perspectives, visiting professors vitalise and contribute to the development of the research environments at the School of Economics, Business and Law. The programme has been able to run thanks to generous support from the business world since its inception in 2009, and the current programme – the Elof Hansson Visiting Professor Programme in International Business and Trade – is funded by the Elof Hansson Foundation.

STUDENTS WIN SWEDISH LEGAL CHAMPIONSHIPS Madhusha Gurusinge and Astrid Svensson secured a win in the Swedish Legal Championships. The final was decided in the Supreme Court, where the students’ presentation was judged by five Supreme Court Justices. In addition to the national final, they also won a prize from Mannheimer Swartling.

AWARD FOR THE BEST MASTER’S THESES The best Master’s thesis from each programme receives ‘The Malmsten Award for Best Thesis’, funded by the Richard C Malmsten Memorial Foundation. Pictured, from left: Sara Lindgren, Felix Ebert, Desislava Chukarska, Johanna Herstedt, Nguyen Cao, Axel Gillmert, Natalia Vdovina, Erik Johansson, Arlina Erlandsson, Tim Vincze, Viktor Björklund, Amanda Cullberg, Daniel Gustafsson, Henrik Persson, Johan Malmsten (chair of Richard C Malmsten Memorial Foundation), Daniel Jansson, Mariya Kristiansen.

STEN-OLOF PALM SCHOLARSHIP The 2019 recipient of the Sten-Olof Palm scholarship was Anna Forkman, who gets a year’s internship at the Swedish-American Chamber of Commerce in Washington D.C. plus SEK 240,000 to cover her living expenses while she is there. The scholarship is awarded by the Gothenburg Traders’ Association and is open to students in the field of business administration at the School, who have a particular interest in trade.

MATILDA ARVIDSSON RECEIVED SCHOLARSHIP Matilda Arvidsson, postdoc at the Department of Law, was awarded SEK 125,000 by the Royal Swedish Academy of Letters, History and Antiquities as part of the Bernadotte programme for her project ‘Homo + Ludens: A new human and its creation of new legal norms in warfare systems and combat wargame training’. “It is extremely encouraging, as a junior researcher, to know that senior researchers have faith not only in the project, but also in me as a person,” says Matilda Arvidsson.

KLAS AND ANTON WON PRIZE FOR THEIR THESIS The students Klas Martinsson and Anton Åstrand won SEK 10,000 for their thesis ‘With BAS as base? A study of the BAS chart of accounts’ standardisation within Swedish trade organisations’. The prize was awarded by the BAS-stakeholder Association.

CECILIA MALMSTRÖM APPOINTED VISITING PROFESSOR Sweden’s former EU Commissioner Cecilia Malmström has been appointed as the new holder of the Assar Gabrielsson Visiting Professorship. The assignment comprises 20 per cent during the period 1 January to 31 December 2020. As a Visiting Professor, Cecilia Malmström will meet students, researchers, alumni and partners to the School, in discussions and lectures.

THOMAS STERNER RECEIVED MEDAL FROM THE SCHOOL Thomas Sterner, professor of Environmental Economics, is the 2019 recipient of the ‘Pro Studio et Scientia – for commitment and science’ award, with the citation: For having – with clear academic ideals, curiosity and a strong social commitment – established and developed environmental economic research and thereby contributed to the School’s development as a strong international centre of academic excellence, with high social relevance.

65TH ANNIVERSARY In September, the School hosted a group of alumni who started their studies at the School in 1954.

BO FOUND STOLEN SCULPTURE In December 2018, the sculpture ‘Aren’t I Scrumptious?’ was stolen from the entrance to the School. The artwork, which has the shape of a female leg, is made by the well-known Norwegian-Swedish artist Kjartan Slettemark. The artwork was later found in a plastic bag near the School by Bo Norming, who returned it to Vice Dean Ewa Wikström.

AWARD FOR THESIS ON GREEN BONDS Isak Eliasson and Karl Ehrensky have received AP2’s finance and sustainability award 2019 for their thesis ‘Green bonds and their true contribution to sustainable development’. AP2 established the award in 2011 to inspire students to write theses on finance and sustainability. The award comes with a prize of SEK 20,000.

TRACING COFFEE ALONG THE NEW SILK ROAD

Researchers Trisha Rajput and Abhinayan Basu Bal followed the new Silk Road’s digital infrastructure from Chongqing in China to coffee farmers deep in rural India, but it was a journey that started at the School of Business, Economics and Law in Gothenburg.

Trisha Rajput and Abhinayan Basu Bal are both originally from India, but their research collaboration began at the Department of Law within the School of Business, Economics and Law at the University of Gothenburg.

“I come from the field of public law and Abhinayan from private law, so we sometimes come at things from different angles, but that is usually good for the research. Above all, we share an interest in issues concerning digital trade, such as electronic platforms, blockchains and single windows,” explains Trisha Rajput.

The Belt and Road Initiative showed the way The coffee project arose out of a curiosity about the Belt and Road Initiative, China’s drive to create new ‘Silk Roads’ to Europe and Africa. Since its launch in 2013, China has invested heavily in building infrastructure and removing obstacles in order to promote trade. For a better understanding of China’s ambitions, the duo established a partnership with the Southwest University of Political Science and Law in Chongqing.

“When we visited Chongqing, we discovered that they had set up a pilot free trade zone in the area, which included a new coffee exchange to challenge the established exchanges in London and New York. We decided to follow the route that the coffee took, to see what the Belt and Road Initiative actually meant for those involved over the long term,” says Abhinayan Basu Bal.

Organic coffee in the shade With the help of a research grant from the Swedish Foundation for International Cooperation in Research and Higher Education (STINT) and the School of Business, Economics and Law’s Partnership Programme, the researchers were able to conduct field studies of the region’s major coffee growers in Indonesia and India. In India, they visited coffee regions on the east and west coast. “In Andhra Pradesh, we went to an area where the local people grow coffee at the back of the house and dry the cherries on the roof.

It’s shade-grown coffee, where the plants are

protected beneath large trees. The method is sustainable in many ways, because it makes efficient use of water and provides a better working environment for the pickers,” says Trisha Rajput. “Until now, the growers have not been able to capitalise on their ethical coffee. However, the new digital infrastructure makes it possible to trace the origin of the coffee with extreme precision, ensuring that some of the premium price reaches the growers, rather than just the middle-men. Digitalisation also gives growers with smaller quantities a better negotiating position when it comes to selling their goods. We saw similar challenges to the status quo in Indonesia. Although the Belt and Road Initiative is much debated, it appears, at least in this case, that shaking up the current structures for coffee trading is bringing positive benefits.”

From the School to the world Several times during the interview, the conversation returns to the special research environment at the School of Business, Economics and Law.

“We have a unique supply chain cluster here, with partners from logistics, finance and law. We also collaborate with researchers from the IT Faculty. It’s an environment that is open to working across boundaries and bringing in social aspects. I actually don’t think a project like this would have been possible in many other places around the world,” says Abhinayan Basu Bal.

The research has generated several articles and the results have also been presented in a number of forums.

“Coffee is an interesting example, because it places social, cultural and economic questions on the table. We’ve presented our findings to the United Nations Commission on International Trade Law (UNCITRAL), at the International Chamber of Commerce in London, at the University of Lucerne, at the University of Westminster and, of course, here in Gothenburg. Now we’ve also received new research funding to continue our work,” concludes Trisha Rajput.