Common approaches to sustainability in relation to holistic

ap-proaches to sustainability in developing holistically sustainable bioenergy business, the common bioenergy business approaches must first be determined. The maturity model of corporate responsibility for sustainability depicts bioenergy business approaches to sus-tainability according to the first research question. The common approaches at the first level of the acceptability orientation and at the first level of the profitability orientation are, respectively, compliance with legislation (in line with Baumgartner (2009), Baum-gartner and Ebner (2010) and Fava (2014)) and business-economic sustainability includ-ing eco-efficiency measures (in line with Dyllick and Hockerts (2002), Korhonen and Seager (2008) and Bocken et al. (2014)). The requirement to comply with legislation in-cludes, along with the RED, the consideration of GHG balance that is a common subject of bioenergy sustainability assessments (Buchholz et al., 2009; Cherubini and Strømman, 2011). The assessment of energy balance, which is another common subject of bioenergy sustainability assessments along with the GHG balance (Buchholz et al., 2009; Cherubini and Strømman, 2011) is included in the eco-efficiency considerations.

Publication II found that the standards and certification systems applied to sustainable bioenergy seem as equally important as legislation to many bioenergy businesses. Pursu-ing compliance with sustainability standards and certification systems could, thus, repre-sent a common approach to sustainability. The interest in standards and certifications im-ply bioenergy businesses’ interest in verifying the sustainability of their operations and products for different stakeholders. Using standards and certificates as a tool to communi-cate sustainability to stakeholders represents a rather proactive approach and could be related to the profitability-acceptability orientation. It could be important for bioenergy businesses to develop proactive approaches towards bioenergy sustainability standards and certification systems similar to those described in Publication IV in the context of

5.1 Contribution of the results to the research objective and questions 121 sustainability legislation. That is, bioenergy businesses should influence the requirements that are included in standards and certification systems.

A further approach that most bioenergy producers are likely to consider to be important is meeting customers’ requirements. However, the biofuel business that serves consumers is largely regulated, and consumer requirements could be few. In contrast, in the case of technology providers, the customer order largely determines the characteristics of the product. The boundary conditions for the product do not, however, exclude the oppor-tunity to demonstrate the added value the customer will access from using the products;

for example, a reduction of the customer’s GHG footprint.

The results and the maturity model of corporate responsibility for sustainability reinforce the view previously presented in the scientific literature that corporate sustainability re-quires more than managing the commonly acknowledged first prerequisites of sustainable business, compliance with legislation and business economic sustainability. However, these first steps towards sustainability could be burdensome as such.

Publication I showed that the sustainability considerations that are related to the logistical, economic, regulatory and environmental conditions of establishing long-term business include a large variety of issues. Unless this mostly business-as-usual part of sustainabil-ity (or as Publication III called it, sustainabilsustainabil-ity-as-usual) is under control, proceeding towards more advanced sustainability considerations could be challenging. It seems that the logistical, economic, regulatory and environmental sustainability challenges could create significant obstacles or bottlenecks for the development of the bioenergy business.

Publication I showed that the Russian wood pellet producers could face significant logis-tical challenges when attempting to serve the European wood pellet demand; for example, the capacity and the compatibility of port infrastructure, as well as the economic condi-tions, could be challenging. Competitors from, for example, North America that have access to large capacity vessels could gain a competitive advantage over Russian produc-ers. However, in the case of the Russian wood pellet producers, a competitive advantage could be retrieved from the more beneficial GHG emission balance that is based on shorter sea transportation distances. However, initiatives that aim to protect the ecosystem of the Baltic Sea, which is a local sustainability issue, could undermine the possibilities for sea transportation.

The results of the case study presented in Publication I further implied that the European quality standards, sustainability legislation and possibly demanding customers set high requirements for the management of the whole supply chain that could, in general, prove challenging for biofuel producers that are based in areas of less stringent legislation and standards. The research in Publication IV indicated that complying with the EU sustain-ability legislation could represent a significant managerial challenge because it requires, at a minimum, a comprehensive knowledge of the legislative processes, an inventory of applicable legislation, and an understanding of the legislative requirements at both the EU and national level. Furthermore, to maintain compliance, businesses should allocate human resources to the key tasks associated with following, preferably anticipating, and

even influencing, the legislative developments at the EU level. Publication IV concluded that small enterprises and those companies that are strictly focused on their core business and maintaining profitability may experience difficulty securing these resources.

Thereby, foreign bioenergy operators that seek new market opportunities and only begin to get acquainted with the EU legislation (also all other laws beyond sustainability legis-lation) could find the EU a rather hostile business environment. For example, the capa-bility to conduct advanced calculations of the GHG emission reduction potential of a bio-fuel product is likely to be, or become, a precondition that must be met for providers to sell the product on the European market, along with the ambitious EU GHG emission reduction targets discussed in Section 1.1 and outlined in RED II proposal (COM(2016) 767 final). Vice versa, the European bioenergy producers could be in an advantageous position from which they can identify new market areas. Previous literature has further discussed the impact of protectionist economic support policies as a barrier to interna-tional bioenergy trade (Junginger et al., 2013).

Publication III suggested that businesses at the maturity level of the sustainability orien-tation do not operate distinctly from the other orienorien-tations. That is, bioenergy businesses at the level of sustainability orientation consider the same sustainability questions as the other orientations and utilise the same methods and tools. However, as the sustainability orientation has been reached, the perspective has shifted from business first to sustaina-bility first, and the perspective with regard to the other orientations should change. The following chapters will address these changes.

Traditionally, the first level of the profitability orientation is concerned with maximising profits and responsibility to shareholders. From the sustainability-first perspective, the objective of maximising profits changes towards ensuring sufficient profits to running a sustainable business. As Ketola (2010) stated, sufficient profits cannot be determined nor-matively from outside, but should be determined within the organisation. In practice, shareholders are likely to require a certain return on capital and this represents profit for private good. However, the Economist (2005a) argued that the pursuit of private good does not exclude the opportunity to contribute to common good. This is somewhat con-trary to the ideas presented by Ketola (2010) and Dyllick and Muff (2016), who asserted that the prerequisite of a truly sustainable business is the production of common good as opposed to private good; i.e., profit for shareholders.

Efficiency improvements at the second level of the profitability orientation are welcome from the sustainability-first perspective; however, a more holistic as opposed to reduc-tionist approach should be employed and, thereby, sub-optimisation and problem-shifting should be avoided. Publication II stated that bioenergy operators and EU-level steering approach resource efficiency from different perspectives. Bioenergy operators emphasise the optimisation of some resources, such as fertilisers and raw materials, from a business economic perspective. The policy approaches resource efficiency more from the perspec-tive of operating within the planetary boundaries. The underlying motivation for resource-saving activities varies, although the activity is similar. It is questionable as to whether

5.1 Contribution of the results to the research objective and questions 123 the motive of the activities matters and, consequently, whether the maturity level of sus-tainability matters, if the result is equally beneficial with regard to global sussus-tainability.

Similarly, the Economist (2005a) argued that, unless a company’s activities are based on greed, the company is likely to consider a long time scale in planning its operations–

which is also essential in achieving sustainability–in its pursuit of economic self-interest and, thereby, contributes to common good, another prerequisite of sustainable business (Ketola, 2010; Dyllick and Muff, 2016). This idea would allow the profitability orienta-tion to be a sufficient approach and healthy starting point for corporate sustainability.

However, from the acceptability perspective, conscious choices to create value to the op-erating environment and the ability to verify such actions to the stakeholders are crucial.

Similarly, according to Publication IV, the first objective of the acceptability orientation, complying with legislative requirements, transforms into internalised responsibility for legislation that naturally includes active participation and interactivity in legislative pro-cesses and anticipation when the maturity level of the sustainability orientation is reached.

That is, the reactive approach to managing legislative requirements evolves towards a proactive approach. Publication IV stated that synergies may occur between the develop-ment of the legislation maturity and the overall maturity of corporate responsibility for sustainability. Consequently, the development of legislation strategies and management, as described in Publication IV, could provide a familiar starting point for many businesses to also develop towards overall corporate sustainability. Aguinis and Glavas (2012), Pa-pagiannakis et al. (2014) and Lozano (2015) further found that legislative requirements are an influential driver of corporate sustainability. However, as Publication II stated, current legislative sustainability criteria and indicators in the EU have a reductionist ap-proach to sustainability and could result in unwanted trade-offs. Thereby, it is essential that bioenergy businesses engage in voluntary sustainability activities that reach beyond the compliant level and the legislative stakeholders in the quest to achieve corporate sus-tainability (Publication II).

The same development can be anticipated in responding to stakeholder requirements;

from the sustainability-first perspective of the sustainability orientation, the approach to stakeholder requirements is rather more proactive than reactive, and the responsibility for sustainability does not depend on stakeholders’ requirements but on internal values and ethics. These considerations are in line with the arguments put forth by Heikkurinen (2013), who concluded that insourced ethical considerations are a prerequisite of a re-sponsible corporate identity. These considerations are also in line with González-Benito and González-Benito (2006) and Lozano (2015), who argued that stakeholder require-ments and expectations determine the level of maturity with regard to corporate respon-sibility for sustainability. This is likely the case, especially when a reactive approach is employed, but applies to all approaches based on outsourced stakeholder responsibility and ethics (Heikkurinen and Ketola, 2012).

Based on the results of Publication II, it is questionable as to whether a sustainability orientation that is distinct from acceptability exists. Publication II stated that the concept of acceptability of bioenergy operations could be related to the whole set of sustainability

PCI, etc. and that the concept of acceptability covers different themes such as legislative compliance, justification of bioenergy, human, labour and property rights, resource avail-ability, local environmental quality and attractiveness, biodiversity and productivity, eco-nomic development, and human health and well-being. Acceptability is present also in the profitability orientation in the responsibility to shareholders, who are the accepting stakeholders. Publication II suggested that adopting the acceptability mindset and orien-tation to sustainability could help bioenergy operators to advance towards greater ma-turity of corporate responsibility for sustainability. Publication II asserted that the sus-tainability principles and criteria that legislation, standards, certification systems and re-search sources provide could take bioenergy operators quite far in terms of sustainability.

The reliance on acceptability, which is based on seeking external acceptance from stake-holders could, however, hinder companies from achieving sustainability (Shevchenko et al., 2016). Shevchenko et al. (2016) found that, although external stakeholders could de-mand true sustainability, they allow partial sustainability (unsustainability) because com-panies tend to take compensating actions to offset harmful impacts. Comcom-panies are, thereby, able to delay the difficult radical shift to sustainability.

Publication II discussed the acceptability of bioenergy operations in depth and, in this discussion, touched upon the concept of relative sustainability, implying that the accept-ability of bioenergy operations depends on their location. Legislation and stakeholders could give more freedom to the conduct of bioenergy operations in areas of less stringent legislation; for example, in developing countries. The minimum level of local acceptabil-ity could, thus, be quite different, especially if developing countries mainly aim at eco-nomic growth, whereas the EU also considers the environmental and social sustainability.

In contrast, the sustainability orientation in the maturity model of corporate responsibility for sustainability must be independent of geographical location because, as Publication II stated, responsible business activities that operate regardless of the freedom given by the operating environment to activities that would be considered irresponsible by higher standards imply a high maturity of corporate responsibility for sustainability. Such re-sponsibility could be manifested, for example, through voluntary environmental protec-tion initiatives and the promoprotec-tion of human rights according to the internal values, ethics and principles of the bioenergy company.