EY Head of Climate Change and Sustainability Services Jānis Kauliņš
The Power Card of Baltic Competitiveness – Local Solutions to Global Problems
Due to the small population and limited resources, Baltic entrepreneurs will never be able to dominate mass production or compete with the world’s largest economies. However, by recognizing our strengths and finding our niche, we have the opportunity to carve out and solidify a unique position on the global stage. The deep connection with nature that characterizes this region allows us to take a leading role in sustainability, including green innovation. Moreover, as relatively small companies, we are known for our adaptability, flexibility, and entrepreneurial spirit—qualities that are essential when introducing new, sustainable technologies and practices.
Leveraging Regional Potential
From a consumer perspective, interest in all things green and sustainable is undoubtedly on the rise, particularly among younger generations. However, it must be acknowledged that the standard of living in the Baltics often leads people to prioritize value for money, meaning that the opportunity to purchase sustainable goods or services remains a privilege for some. When it comes to the competitive advantages of the Baltic region, local solutions are frequently overlooked. Sustainability is about reducing our environmental impact, and by purchasing local products—whether from local farms or made from recycled materials—we not only significantly reduce transportation emissions but also save money. Of course, this doesn’t apply to all goods and services, as not all necessary resources can be sourced within the Baltics, but this is a direction that could help balance everyday realities with sustainable thinking and lifestyles.
Additionally, the Baltic States can continue to leverage their intangible advantages, such as in the IT solutions and software development sectors, where resource requirements are minimal, resulting in a lower environmental impact. We are also strong in the humanitarian field, particularly in culture and arts content creation. In the material world, sustainability is a pressing issue as resources and their transportation become increasingly expensive, leaving a growing environmental footprint. However, the creation of intangible value aligns well with the identity and history of the Baltics.
Sustainability Must Become Part of Business Strategy
Of course, integrating sustainability practices into a company’s daily operations is not without its challenges, as this process can be quite complex. The delay in transposing the European Union’s sustainability reporting directive into national legislation in each country has created a great deal of uncertainty, causing companies to hesitate in making significant changes without clear regulatory guidance. Furthermore, the understanding of sustainability—both in terms of risks and competitive advantages—is still fragmented in the Baltic region, and substantial time and effort are required to fully grasp it, both within companies and across society as a whole.
I believe companies should clearly define their investment goals and strategies to understand how sustainability impacts their business. At that point, what may seem like a distant, theoretical issue will become a very real business concern—one that must be addressed not because new regulations are in place, but because it becomes an integral part of the company’s core mission. Of course, depending on the business model, sustainability may not be a major factor for all companies, but for most, it will be critical in terms of the value chain, financing, and relationships with customers, partners, and suppliers.
By promoting certain regulations, including ensuring transparency around the achievement of sustainability goals, we will strengthen the understanding that the purpose of a company is not only to generate profits for shareholders but also to position itself as a responsible market player.
Good Examples Should Be Shared
Admittedly, sustainability is still a relatively new topic in our region, but there are companies that, despite the challenges, are actively seeking solutions in this area. These companies deserve to be highlighted. That’s why the Baltic Sustainability Innovation Award is held for the fourth year in a row—to recognize the most significant achievements and sustainable innovations in the broadest sense and to foster dialogue between companies and society. By sharing these success stories, we can inspire others to get involved and promote positive change.
We are proud to have EY as the award’s strategic methodology partner and to have had the privilege of working with the event organizers from the very beginning. Evaluating innovation is no easy task, as it’s difficult to assess these achievements on a single scale. Therefore, we focus on two main factors: the impact of the innovation and the scale of the solution. Each year, when reviewing the award applications, we are reminded that our region has already made significant progress in the field of sustainable innovation. We just need to be braver in sharing these successes.
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