Examining the evolving eco-innovation performance in the Finnish forestry industry
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School of Business | Master's thesis
Information and Service Management (ISM)
93 + 20
AbstractThe forestry industry is a mature industry that is characterized by a low rate of innovation (Mikwitz et al., 2008). Moreover, decreasing demand for paper products combined with high production costs has made this industry a heavy polluter. However, despite these challenges, Stora Enso and UPM have survived and thrived in the sustainability arena. In more recent years, both have shifted their focus from paper and pulp products to bio-based products. The aim of this thesis is to examine how their environmental involvement has evolved within the Finnish forestry industry in the last decade. The thesis examines the research gap in existing literature by focusing on eco-innovation at the micro or industry and firm-specific level. Furthermore, it aims to satisfy three main research objectives. Firstly, it observes the eco-innovation changes within the Finnish forestry industry by using the eco-innovation framework of Garciá-Granero et al. (2018). Secondly, it extends and develops a more comprehensive set of eco-innovation indicators by filling the gaps in the existing framework with new findings. Lastly, it measures the environmental and financial performance over the time period going from 2008 to 2017. The key findings of this study suggest that significant measures for eco-innovation in mature manufacturing industries such as the forest industry are R&D, environmental leadership activities, and material sourcing since they contribute to creating new value and opportunities via industrial synergies and efficiencies. It was found that the case companies have evolved in terms of products, processes, and organisational eco-innovation by utilizing current raw materials more efficiently via the development of recycling and reusing options. This shift has led to new uses for pulp-based products that range from the replacement of fossil-bases products to biomedical applications. In terms of the case companies’ performance, both made progress in certain environmental metrics. In particular, fossil CO2 emission was heavily decreased for Stora Enso, while other emission types such as SOx and NOx decreased for UPM. However, no conclusive argument could be established about the connection between financial performance and eco-innovation activities other than that of Stora Enso and UPM retaining their competitive position.
Thesis advisorKuula, Markku
eco-innovation, environmental innovation, sustainability, forestry industry, demand-side drivers, supply-side drivers, environmental development, Environmental Management Systems, EMS