Reijo Karhinen: Companies are facing a huge change

– Combating climate change will be the main source of economic growth for the next twenty to thirty years, Reijo Karhinen says.

PHOTOS: KAI WIDELL

Reijo Karhinen (65)

Working Life Professor, University of Eastern Finland CEO of the OP Financial Group in 2007–2018 Chairman of the Board of the Finnish State Development Company VAKE Oy 2017-spring 2020 Chairman of the steering group preparing the national circular economy promotion programme Member of the Sustainable Recovery Working Group Chairman of the Joint Dining Table Programme Chairman of the Central Chamber of Commerce’s Competence Committee

Companies are facing a huge change

– As Finland moves towards a carbon-neutral circular economy, companies will face dramatic, huge and rapid changes. Fortunately, creativity is at its best when it is placed among constraints, says Reijo Karhinen.

It is the week before Midsummer. However, the retired former CEO of OP Bank Group is not on his forest farm on the shores of Lake Saimaa, but in the heart of Helsinki. He is heading to the Ministry of the Environment: a meeting with the national Circular Economy Promotion Programme is about to begin. Reijo Karhinen is the chair of the steering group preparing the programme.

Finland’s vision is a carbon–neutral circular economy society by 2035. – The transition from a fossil to a non–fossil economy requires bold and rapid renewal by companies and society. Fortunately, creativity is at its best when it is placed among constraints, Karhinen estimates. – The use of natural resources must be on a sustainable footing. Basically, the circular economy is industrial policy. For example, the circular economy means extending the life cycle of products and returning materials for reuse. In addition, there is an increasing shift from ownership to using services.

There will be entirely new business areas

According to Reijo Karhinen, a large number of companies will face a change in their business area. – There will be completely new business areas and the existing ones will die out. Businesses will have to make even drastic changes.

His words are directed to those leading the companies: – Look to the future. Anticipate the future by listening to experts and young people. This will give you an idea of what your company’s new operating environment will look like and how your company can navigate in this environment. You need to understand that combating climate change will be the main source of economic growth for the next twenty to thirty years.

He also urges business leaders to engage in social debate with a proactive approach. – Social media is an easy channel for this today. It is a good place to communicate about the kind of expertise that is needed in Finland in order for companies to succeed in the future. The society must be able to address the needs of companies.

Karhinen emphasizes that a carbon–neutral circular economy will be here in just ten years’ time. – I am very concerned, for example, whether engineers are trained to operate in a carbon–neutral circular economy. No one in the field of technology should focus on the old, linear economy.

Anticipate the future by listening to experts and young people.

Finland in a pole position

According to Reijo Karhinen, economic growth must come from other sources than an excessive use of natural resources in the future. Less means more. He thinks Finland’s chances of succeeding in this change are good. – There is a big change ahead, but Finland is in a pole position. In the 1950s, Finland was carbon neutral, but now we are living beyond our means. Yes, we can adapt, because we are a high–tech country. – I am confident that the digitalization and data economy will bring new economic growth. We have both good business expertise and digital expertise. We just need to be able to combine these skills better. We need to build a way towards a digital welfare economy where data replaces material flows.

According to Karhinen, the transition must not be driven by regulation and restrictions alone, but on a business–oriented basis. – We cannot create anything new unless companies have a constant cash flow. What we need is a carrot, not a stick.

Slush was a wake–up call

Reijo Karhinen retired a couple of years ago. Since then, he has been involved in many things. – Values have always been important to me. Working for a sustainable lifestyle and a sustainable economic structure is, in my view, work for future generations.

He seems really excited about the challenge of moving towards a carbon–neutral circular economy, and describes the 2014 Slush event as a wake–up call for his enthusiasm. – I felt the Finnish operating environment had been gloomy. In the public debate, new things did not go through. New ideas and thinking were met with resistance. “We’ll do the way we’ve always done.”

For Karvinen Slush offered a glimpse of hope: – There were a lot of young people at the event and everything was about opportunities.

He started thinking about what was the group he wanted to belong to. – Do I want to be someone who gets excited and passionate about things, or someone who clings to the old ways.

So he is now heading to the Ministry of the Environment. The government program outlines that a strategic programme promoting circular economy will be planned for Finland.

– We will prepare the proposal for approval by the Government this year.

Ministries, research institutes, Sitra, Business Finland and a large number of companies and municipalities are involved in the preparation work.

Building a log cabin

After the meeting at the Ministry of the Environment, Karhinen heads to the shores of Lake Pihlajavesi in Saimaa. – Our family will assemble another old log building in the yard of our summer house this summer – in the spirit of circular economy. It’s the tenth in a row of buildings. And this newcomer is a real gem. It’s a two–story granary from the 1820s. We will probably celebrate its 200th anniversary, Karhinen describes.

Silviculture is also close to his heart. The Karhinen family is a significant forest owner. Today, Reijo Karhinen likes to call himself a forestry entrepreneur.

A national programme promoting circular economy

The programme is run by the Ministry of the Environment and the Ministry of Employment and the Economy. Objectives of the program by 2035: • A carbon-neutral circular economy is the foundation of our successful economy. Our choices are future-proof and strengthen a fair welfare society. • Less is more: the use of natural resources is sustainable and materials stay in circulation longer and safer. Sustainable products and services are mainstream in the economy, and sharing economy is part of our daily life. • The breakthrough of the circular economy has been achieved through innovation, digital solutions, smart regulation and responsible investors, businesses and consumers. The Finnish circular economy is a strong player in the world and a provider of sustainable solutions in the international market. ym.fi/kiertotalousohjelma