Evaluation of Companies' Motives, Values, and Views Impact on Collaborative Cross-sector Climate Action: Case Study Imatra

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Evaluation of Companies’ Motives, Values, and Views Impact on Collaborative Cross-sector Climate Action: Case Study Imatra

Sonja Jurmu 306141 University of Eastern Finland Department of Geographical and Historical Studies Major Natural Resources Governance Master’s Degree Programme in Environmental Policy and Law

28.4.2021 Supervisor: Lasse Peltonen

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UNIVERSITY OF EASTERN FINLAND Faculty

Faculty of Social Sciences and Business Studies

Unit

Department of Geographical and Historical Studies Author

Sonja Jurmu

Supervisor Lasse Peltonen Title of the thesis

Evaluation of Companies’ Motives, Values, and Views Impact on Collaborative Cross-sector Climate Action: Case Study Imatra

Major

Natural Resources Governance

Description Master’s Thesis

Date 28.4.2021

Number of pages 80 + 14 (appendixes)

Abstract

The need for cross-sector collaboration in climate change issues has increased at all governmental levels with cities exploring innovative ways to promote and implement collaborative climate actions and partnerships with the private sector. This research studies how the private sector’s current climate actions and companies' further motives, interests, and values on climate collaboration should be taken into account in the planning of collaborative cross-sector climate action at a local level.

The study collected 38 questionnaire responses from small and medium-sized companies in Imatra, Finland. A stakeholder analysis was further used to help identify the various levels of interest, needs, and power within the companies. The findings of the questionnaire show that most of the respondents view collaboration positively and share similar values with the city, also showing interest to develop their operations more carbon neutrally. Their image, economic reasons, and feeling of ‘doing the right’ were seen as the most motivating aspects to develop, or not to develop, companies’ operations with the higher number of respondents feeling the lack of knowledge and skills with climate change and being unsure what it means to the companies’ operations.

Climate Collaboration Plan is given as a recommendation for implementation. The research reflects that more active and intense collaboration is possible when actors share similar values and targets, understand their roles and responsibilities in climate action, and share the decision-making power between actors per their capabilities. Cities' responsibilities are setting the platform for collaboration while ensuring that knowledge and tools are shared between actors in the support of sustainable practices and reaching the targets for carbon neutrality.

Keywords: actors, climate collaboration, cross-sector collaboration, climate action

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ITÄ-SUOMEN YLIOPISTO Tiedekunta

Yhteiskuntatieteiden ja kauppatieteiden tiedekunta

Laitos

Historia- ja maantieteiden laitos Tekijä

Sonja Jurmu

Ohjaaja Lasse Peltonen Tutkielman nimi

Yritysten motiivien, arvojen ja näkemysten arviointi yhteistyön kautta tapahtuvassa ilmastotoimissa:

tapaustutkimus Imatra Pääaine

Ympäristöpolitiikka

Työn laji

Pro gradu -tutkielma

Päivämäärä 28.4.2021

Sivumäärä 80 + 14 (liitteet) Tiivistelmä

Lisääntyvä tarve ilmastonmuutoskysymyksissä sektoreiden väliseen yhteistyöhön on kasvattanut ilmastoyhteistyötä- ja kumppanuuksia myös paikallisella tasolla, kaupungien etsiessä innovatiivisia tapoja edistää ja toteuttaa yhteistyöhön liittyviä ilmastotoimia yksityisen sektorin kanssa. Tässä tutkielmassa tutkitaan, kuinka yritysten nykyiset ilmastotoimet sekä yritysten motiivit, kiinnostus ja arvot ilmastoyhteistyössä tulisi ottaa huomioon suunniteltaessa eri alojen välisiä yhteistyötoimia paikallistasolla.

Aihetta tutkitaan Imatra tapaustutkimuksen kautta ja kyselylomake lähetettiin Imatran pienille ja keskisuurille yrityksille. Sidosryhmäanalyysiä käytettiin myöhemmin tunnistamaan yritysten kiinnostuksen, tarpeiden ja vallan eri tasot. Kyselylomakkeen tulokset osoittavat, että suurin osa vastaajista suhtautuu yhteistyöhön myönteisesti ja jakaa samanlaiset arvot kaupungin kanssa, vastaajien lisäksi osoittaen kiinnostuksensa kehittää toimintojaan hiilineutraalisimmaksi. Imago, taloudelliset syyt ja tunne "oikeaan toimintaan" nähtiin motivoivimpana tekijänä kehittää tai olla kehittämättä yritysten toimintaa, ja suurin osa vastaajista koki tiedon ja taitojen puutteen esteenä ilmastotoiminnassa.

Osana tutkimusta tuotettiin yhteistyösuunnitelma Imtran kaupungille. Tutkimuksen tulokset heijastaa, että aktiivisempi ja intensiivisempi yhteistyö on mahdollista, kun toimijoilla on samanlaiset arvot ja tavoitteet, he ymmärtävät roolinsa ja vastuunsa ilmastotoimissa ja päätöksentekovalta jaetaaan toimijoiden välillä kykyjen ja resurssien mukaisesti. Kaupunkien vastuuna on luoda pohja ilmastoyhteistyölle ja varmistaa samalla, että tiedot ja työkalut jaetaan sidosryhmien välillä kestävien käytäntöjen tukemiseksi ja hiilineutraaliuden tavoitteiden saavuttamiseksi.

Avainsanat: ilmastoyhteistyö, sektorien välinen yhteistyö, sidosryhmä, sidosryhmäanalyysi

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PREFACE

The basis for this master’s thesis research stemmed from my interest and passion for collaborative actions in climate change. Collaboration and conflict resolution have interested me since the beginning of my studies as I believe that we, as a society, could do better involving different actors in the shared fight against climate change. Once the opportunity arose to study climate collaboration, my goal was to find ways on how collaboration could be better incorporated into local climate action.

I extend my gratitude to the city of Imatra for allowing me to include a case study in my thesis topic. I truly enjoyed the opportunity to view what could be achieved in Imatra when using the tools presented from the findings of the empirical data.

Thank you to all the companies in Imatra that took part in the questionnaire. Without your participation, this master’s thesis would have been a lot different.

I would also like to extend my gratitude to my contact person in the city of Imatra, Eetu Ahlberg, and to my thesis supervisor, Lasse Peltonen. You provided me helpful advice and useful contributions during this research process.

Äidille.

To my mom, who is an inspiration to me in the academic and everyday world. She is currently pursuing her master's, showing that learning is an ongoing process, and it is never too late to

develop oneself.

****

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Figure 1: Outline of the study. ... 8 Figure 2: Summary of the major frameworks and findings from empirical studies between 2006- 2015 (Bryson et.al 2015, 651) ... 16 Figure 3: Schematic representation of key methodological steps for stakeholder analysis (Reed et al. 2009, 1947) ... 36 Figure 4: The division of respondents between industry by percentage. ... 40 Figure 5: The percentage of companies that consider the environmental impacts in their actions in areas of waste, transportation and movement, and procurement... 41 Figure 6: The percentage of companies who have environmental strategies in place. ... 42 Figure 7: How important respondents rate different aspects as motivators to develop or not to develop their practices for more environmentally friendly. ... 45 Figure 8: How important the respondents see actors as partners in climate collaboration when 1

= not important at all, and 5 = really important. ... 49 Figure 9: Respondents' views on ten claims on climate action and collaboration. ... 50

List of Tables

Table 1: Companies motivations for collaboration (adapted from Gray and Stites 2013, 33) . 19 Table 2: Opportunities and challenges in public-private climate collaboration ... 21 Table 3: Collected themes from the actions that companies take for energy reduction and sustainability, derived from the open-question responses. ... 44 Table 4: Actors ranked based on their expected roles in climate collaboration from the viewpoint of the private sector. ... 57 Table 5: Collaboration model (adapted from Hiiilineutraalisuomi 2020). ... 64

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1 INTRODUCTION

Climate change is a global phenomenon that is calling actors on all levels for collaborative mitigation and adaptation to stop global warming and further stop the destruction of the environment. Now, more than ever, a collaboration between actors is needed to support the global climate targets and ensure actors on all levels are involved in the climate work. This introductory section will give background information on the regulatory instruments for carbon neutrality to support the later argumentation for the need for cross-collaboration on a local level.

Furthermore, the objective of the thesis alongside the research questions supporting the said objective is introduced.

1.1 Research background and motivation

Globally, there has been a movement from governing to governance especially on environmental and social issues. Environmental governance is seen as the movement away from state-based governing to shared governance where all interested parties are involved in decision- making related to environmental issues. Therefore, environmental governance “comprises of rules, practices, policies, and institutions that shape how humans interact with the environment” (Haque, 2017). Environmental governance allows both the public and private sector in addition to non-governmental organizations (later the NGOs), communities, private persons, and others to make decisions about the environment and to manage conflicts related to environmental issues. The collaboration includes the collaborative actions between organizations to achieve the common outcome (Bryson, Crosby and Stone 2006, 45) and it is widely seen as a welcome movement and a step away from state-based governing to address social challenges.

New regulations and targets on greenhouse gas (later GHG) emissions, especially on carbon dioxide emissions, are aiming to reduce the impact of the greenhouse effect and help to achieve net-zero carbon emissions in the future. The Paris Agreement is the first legally binding international treaty on climate change and was adopted at United Nations Framework Convention on Climate Change in Paris on 12 December 2015, entering into force on 4 November 2016. The Paris Agreement set the target for reaching the global peak of GHG emissions as soon as possible and to achieve a carbon-neutral world by 2050.

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Carbon-neutrality means that the society would only produce the amount of GHG emissions as it can absorb. (Berninger 2012, 17) This would mean, e.g., reducing the usage of fossil fuels, increasing renewable energy sources, and ensuring the protection of carbon sinks. Heinberg (2010, 10) notes that to ensure the post-carbon transition, not only alternative energy sources and greater efficiency are the solution, but carbon neutrality would require changes in urban design, land-use patterns, food systems, health care, tourism, and much more.

The European Union (later the EU) follows the commitment to global climate action under the Paris Agreement and its long-term goals and has set a target for carbon neutrality by 2050 (LT- LEDS 2020). This objective is also at the heart of the European Parliament resolution of 15 January 2020 on the European Green Deal. European countries have published their targets for carbon neutrality under the requirement from the EU and to both support the global climate work and to protect against further destruction of the environment.

In Finland, the national Climate Change Act (609/2015) was introduced 1 June 2015 with a set target of 80% reduction of GHG emission in relevance to the 1990 levels by 2050 with a notion that the target is to be based on the most updated international agreements or EU legislation.

Following the Paris Agreement and European Green Deal, Sanna Marin’s Government Programme introduced Finland’s new national climate policy in 2019 with an ambiguous goal to reach carbon neutrality by 2035. This target has been set on the strategic theme of ‘carbon- neutral Finland that protects biodiversity’ which requires actions on climate change mitigation and biodiversity protection. (Programme 2019)

The set national target for 2035 would require long-term climate measure designation besides intensifying national emission reduction requirements. The Finnish government together with non-governmental organizations have been working toward carbon reduction and neutrality. As part of this, projects to support the actions toward carbon neutrality on a local level have been introduced, e.g., the first phase for the Hinku network started in 2008 and the network has set a goal for the participating municipalities to achieve carbon neutrality by 2030. (Berninger 2012, 14)

In my master’s thesis research focus is on a case study of Imatra to determine opportunities and challenges in local cross-sector collaborations concerning public-private interactions in climate action. The Finnish city, Imatra, has set a goal to be carbon-neutral by the year 2030. This target

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is part of the wider climate work planned by the city of Imatra and the municipal Climate Working Group. To achieve the target, the city has introduced different ways to invest in economic, social, and ecologically sustainable development, and in addition to the municipality’s activities, there has been increasing interest from the city to increase the collaboration with other actors within the town, such as the private sector. This master’s thesis research will be stakeholder-based with a focus on actors and their motives and interests. The study will furthermore supplement relevant research already done on cross-sector collaboration and provide recommendations for actions for same-sized cities that are similarly interested in cross-sector collaborative climate work.

1.2 Research context: cross-sector collaboration in local climate action

The thesis research is based on the main theoretical findings of Bryson, Crosby, and Stone who introduced the framework for cross-sector collaboration in 2006 and later revised this research in 2015. This framework will be supported by other research conducted on cross-sector collaboration. Before discussing collaboration on local climate action, it is important to understand what is meant by collaboration, cross-sector collaboration, and partnerships.

Collaboration is the interaction between two or more parties who share the same desire or need to achieve a particular goal or outcome. Differing from cooperation, collaboration requires knowledge sharing in the process between participants, but cooperation is more focused on just meeting the end target or product. A partnership is an arrangement between at least two people or groups who are working together but have specific roles and responsibilities. As a set of rules, partnerships can be seen more intense and deeper than collaboration. Collaboration is often used to generate new information or solve, a shared challenge or problem between actors. (Owen and Larson 2017, 9-10 and Kozar 2010, 16-17) Collaboration as a concept is studied more specifically in chapter 2.

The term often used for collaborative action is cross-sector collaboration. Bryson, Crosby, and Stone (2006, 44) define cross-sector collaboration as partnerships between the government, business, nonprofits, communities, and the public as a whole. These actors are either linking or sharing information, resources, activities, and capabilities between either two or more sectors to achieve the outcome that would not be possible to achieve in one sector separately. Cross-sector collaboration is widely used in public and social challenges and is considered by scholars as a

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necessary strategy in public problems. However, some argue that cross-collaboration is currently too complex a phenomenon to be used by the practitioners and therefore would require conceptualization as a dynamic system. (Bryson et al 2006, 44, and 2015, 647-8, 657 & Agranoff and McGuire 1998, 67-68).

The research focus will be on local climate action. To understand the aim of the research, few definitions need to be explained. Firstly, the local level can be defined as “the lowest administration level within government state such as the municipality of the district” (UNESCO Institute for Statistics 2021) and in this research project, the local level is used to refer to municipal governments, such as the cities. Secondly, climate action, or work, can be determined as all the actions taken to reduce the impact of climate change. Berninger (2012, 13) emphasizes the importance of tackling unsustainable issues especially on energy production, buildings, transportation, and food, to ensure that a carbon-neutral society is achievable. These are important aspects when planning the local climate action; within the case study of Imatra, energy efficiency, renewable energy, carbon-neutral public transport, and climate-friendly consumption are examples of actions planned to reach the carbon-neutral city target.

Within the case of Imatra, there has been an interest from the city to increase collaboration with the private sector concerning local climate action. This type of cross-sector collaboration can be called a public-private partnership or collaboration. (Seitanidi, Koufopoulos, and Palmer 2010, 140) The city has had the success of partnering up with large private companies in Imatra but so far, collaboration with small and medium-sized companies has been more challenging. The research aims to explore the city’s local climate policies and by using a questionnaire for the small and medium-sized companies within Imatra, determine the current obstacles and factors affecting cross-sector collaboration between local governance and the private sector in the case of Imatra.

Both the private and public sector have their reasons, motives, and interests to choose cross- sector collaboration instead of working alone. This is usually due to a common goal that has been recognized before the collaboration and has in this way set the motion to collaborative actions. A common goal can also be decided once collaboration has started to weigh parties' interests and values for the collaboration, helping to determine a shared target for collaborative action. In the environment and climate collaboration, common goals can be based on sustainable

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practices, protection or enhancement of the environment, carbon reduction and carbon footprint, and so on. At a governance level, common goals are often derived from global commons, which are resource pools and domains to which all nations have legal access but also have a responsibility to care. (Buck 1998, 6) When moving to lower levels of governance, the goals often become more local; however, this does not mean that the goals could not be based on global commons issues. E.g., a carbon-neutral society tackles the global issue of climate change.

On a local level, like in municipalities, global commons are still evident even though the actions taken are local.

The motivations, interests, and other factors define the parties' approach to the common goal.

However, issues arise especially on public-private collaboration as incompatibilities can be recognized between the parties. Grudinschi (2014, 21) argues that the fundamental difference between public and private parties is the context in which they operate. Public sectors decision and actions need to provide public value and due to this, public sector actions are driven by recognizing and creating public value. Based on Moore (2013, 8), the public value can be determined to some degree as the governmental bodies creating something of value to either improve quality of life for individuals or collective society. However, questions arise on what particular actors are the main determinators of public value and what performance of the governmental bodies would be the proper answer to public value.

On the other end, the private sector aims to increase the economic value of their action. Even though the private sector increasingly notes the environmental issues within their actions, the main driver for companies to make low-carbon changes in their operations are the set obligations by regulatory bodies. It can be argued that overall a movement from obligation to responsibility is needed, especially since the private sector does bring innovations, responsiveness, efficiency, and provision of specific skill sets and resources to the table when collaborating with the public sector. (Scheyvens, Banks and Hughes 2016, 372 and 380) However, the obligations and expectations of differently sized companies and different industries face, differ greatly and small and medium-sized companies do not necessarily have the same obligations that large multinational companies. Altogether, public-private collaboration is set from the beginning to face obstacles and challenges due to different values, interests, and motives. In this research

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project, these factors will be studied from the point of view of the private sector to determine options for cross-sector collaboration in the case of Imatra.

1.3 Research gaps

Both theoretical and empirical research on cross-sector collaboration has rapidly increased from the early 2000s, while research on governance and collaboration has been changing the way how collaborative action and partnerships have been seen already since the 1980s. (Bryson et al 2015, 647 & Selsky and Parker 2005, 849) Empirical studies have provided important information on the collaboration between sectors in international, national, and regional levels in climate change mitigation and adaptation, but little is known how the involvement of private actors should be fostered in local climate action. (Klein, Juhola, and Landauer 2017, 1056) Climate action includes the actions taken to reduce the impact of climate change besides action to adapt to possible climatic changes. It should be noted that several areas of collaboration research are well developed, and these include areas such as effective collaboration leadership, the multilevel nature of collaboration, and likely collaboration outcomes. (Bryson et al 2015, 658-659) These findings support the argumentation of the thesis and later on, information for practitioners is collected from other areas of collaboration research when recommendations for action are proposed at the end of the thesis research.

Regardless, limitations on cross-sector research have been recognized. Research has proven that collaboration practice is ahead of collaboration scholarship and that scholars who focus on collaboration offer less theoretically grounded research that would be needed. Even though this research can be used by practitioners, more research that jointly brings practitioners and scholars together would be needed in cross-sector collaboration. (Popp et al 2014 as cited in Bryson et al 2015, 658-659) There are success stories about cross-sector collaboration, especially with effectiveness and efficiency, but the value of public service highly depends on the sectoral choice for collaboration. (Andrews and Entwistle 2010, 679) The difficulties and challenges of collaboration have also been studied by Vangen and Huxham (2012) and Popp et al (2014). The thesis study aims to make a contribution to collaboration management in the prospect of environment management and climate action planning.

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7 1.4 Research objective and questions

The main objective of the study is to evaluate the views, interests, and motives of the private sector in relevance to climate change and collaborative climate action through the case study of Imatra. The aim is to recognize the possible opportunities, challenges, and conflicts in cross- sector collaboration based on factors recognized in the collaboration. The focus is on small and medium-sized companies in Imatra that are not directly affected by climate change or carbon neutrality within their actions but would be still ideal partners for the city when planning actions for carbon neutrality.

The research provides further recommendations for Imatra and creates models that could be used in same-sized cities in Finland when planning collaborative cross-sector climate action.

This allows broader material to be analyzed and highlights the commonalities that may arise from the literature review and further analysis of the collected empirical data. The focus will be on collaboration between the public and private sectors to recognize opportunities for collaboration within local policy planning and management within municipalities. By analyzing the views, motives, and interests of the private sector it is possible to recognize conflicts on local climate policy and obstacles on implementing climate targets. The main research question supplemented by several sub-question is listed below.

Main research question:

What challenges and opportunities can be identified from companies’ current climate actions and further motives, interests, and values on climate collaboration when planning collaborative cross-sector climate action at a local level?

Sub-questions:

a. What is the role of cross-sector collaboration in local climate work and how can it be used in the planning and implementation of public-private collaboration?

b. How can continuous and successful collaboration and partnerships be achieved between actors in climate-related work?

c. What factors and obstacles are identified from the empirical data concerning companies' current practices and views on climate collaboration?

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8 1.5 Outline of the study and limitations

The research topic was chosen in December 2020 with the main part of the research conducted during spring 2021. See Figure 1 for the outline of the study. The first part of the thesis includes the introduction to the background and objective of the thesis in addition to presenting the supporting framework for the thesis project. Theoretical approaches and the current state of the research for cross-sector collaboration are discussed in the setting of local public-private climate action. Additionally, the values, motives, and interests are further discussed as these are important in the latter part of the thesis.

Figure 1: Outline of the study.

INTRODUCTION

THEORETICAL BACKGROUND Collaboration

Climate action

Public-private

From theory to practice

METHODOLOGY AND RESEARCH DESIGN

CASE STUDY: Imatra

RESULTS AND DISCUSSION

RECOMMENDATIONS AND CONCLUSIONS

Supporting practices with theory

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In the second part of the thesis, the case study Imatra is introduced alongside methodological choices used in the research. The empirical data is collected from literature review and questionnaire, and later stakeholder analysis is used as the method of analysis. From there, the results of the research are analysed, and recommendations are provided. The questionnaire was conducted in February 2021. By the end of the month in April 2021, the results of the questionnaire were analysed with the supporting empirical data and the thesis returned for evaluation.

A few limitations are recognized in this master’s thesis research. It should be noted that this research will not provide any recommendations for the private sector in relevance to the public- private collaboration relations, e.g., on planning companies’ policies, strategies, or models for sustainability, carbon neutrality, and climate change. This thesis will solely focus to serve the public sector and evaluate the interests, motives, and views of the private sector in the account of how these affect collaboration planning and management by the public sector, especially at the city level.

Additionally, a policy recommendation for the case study city, Imatra, will be given based on the empirical data collected. Even though this recommendation can be used by other cities sharing similar characteristics with Imatra, this way the results of empirical data being somewhat generalized, this research will not guide policymakers on a wider national level.

Bryson, Crosby, and Stone (2015, 659) recognize the challenges in cross-sector collaboration and note that providing research-based guidance for the design and implementation of cross- sector collaborations to policymakers is substantial. This is due to the methodological challenges and the complexity of the issue, and further research would be needed to use the framework on a more national or international level.

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2 FRAMEWORKS ON COLLABORATION

Theoretical approaches and frameworks are used to understand a specific phenomenon better or from a different perspective. The theoretical framework can bring focus on how different actors, levels, and institutional arenas interact for knowledge sharing, action coordination, and collaboration in the making of decisions for collective and shared outcomes. (Ansell and Torfing 2016, 1) In this chapter, it will be noticed that cross-sector collaboration is a complex issue and that there is no single “theory” of collaboration. By introducing different theories and concepts for collaboration, a baseline can be determined for later empirical research. Most examples introduced in this research focus on climate mitigation, but it should be noted that also actions for adaptation are an option when planning cross-sector collaboration.

2.1 Actors at a local level

Actors, parties, bodies, stakeholders; all of these concepts are used to describe the participants of collaboration. In this master’s thesis research, the concept ‘actor’ is used to describe the collaborating party. It should be noted that even though stakeholder theory and analysis are introduced and used in this research, ‘stakeholder’ as a concept is not; this is due to the controversy of the word. There is no consensus as to what stakeholder means due to the variety of definitions with the differ especially on the ‘claiment’ aspect of these definitions. (Miles 2012, 285-286) In this master’s thesis research, the stakeholder as a concept does not serve the study. When discussing individual companies, stakeholders could only be used to describe specific actors as a group; however, in this research, it is important to view the companies separately even though some commonalities can be drawn in the analysis phase.

The public and private sectors are studied in this research. Lane (2000, 1-2) defines that the public sector includes the institutions of politics and government, providing both public services and goods, while the private sector constitutes various market institutions. In addition to the public and private sectors, the voluntary sector includes non-governmental organizations. The public and private sectors are specifically studied on a local level and in this research project, the local level is used to refer to municipal governments, such as the city of Imatra. Many actions at a local level support the national, regional, and international political decisions made on

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climate change and carbon neutrality with these policies recognizing the increasing need for public-private climate collaboration.

Kettl (2015, 224-226) describes the governmental bodies' job to define the values on behalf of the community, set the floor for discussion and decision-making, ensure equity, provide funding for social and economic goals, and manage risks. Protecting and managing that which is shared, so-called commons, are governments responsibility; however, difficulties arise when taking a closer look at the means and extent of that responsibility. (Kaufmann 2010, 337)

Recent research shows that sub-national actors, like regions, localities, and cities, have an increasing role and growing influence on environmental and climate change issues. As stated in the IPCC Summary for City Practitioners (2018, 7), cities must promote alignment with citywide GHG reductions, strong cooperation among cities, businesses, and residents, leaderships of climate education, and awareness of climate risks and solutions, and rapid adoption of new carbon-reduction technologies. As a result, cities are setting more ambiguous targets for GHGs reduction than what the national levels of governance have set, and as part of this, forming transnational alliances and setting their initials to address climate change. (Evans 2012, 71 and 73) While land-use planning and transportation are the sectors where cities have the most important part to play, increasing smart energy management in the built environment within both new and old development and buildings indicates cities' responsiveness to the current climate projections and policies. (Betsill and Bulkeley 2003, 180)

In Nordic countries, decision-making in planning has graduated toward municipalities from where it is outsourced increasingly to private sector to take advantage of the local knowledge.

(Kristjánsdóttir 2017, 317-318) In Finland, local public sector roles have a focus on community planning. Community planning is mainly made by the municipality official which is why municipalities have such an important role in determining which direction urban structure goes.

Both municipalities and governments should favor public procurement decisions that support climate-friendly and carbon-neutral targets. Municipalities and municipality officials have an additional important role in inspiring and informing companies, organizations, and citizens in their climate actions. (Berninger 2012, 155)

Within the private sector, companies' role in environmental protection has changed in recent years. Pinkse (2015, 218) discuss how corporations used to be the actors opposing

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environmental governance, often trying to postpone environmental regulations. Nowadays, the private sector has adapted more proactive role, e.g., through corporate social responsibility (CSR). Frederick (2018, 4) define CSR as the actions taken by a company that deliberately increases the social well-being of those people who are affected by the actions of the company.

According to Evans (2012, 63-64), the private sector is nowadays trying to respond to the market pressure from investors and customers, regulatory pressure from governments, and social pressure from the public and NGOs to improve their operations for more environmentally friendly. Economic growth can be seen as automatically harming the environment which is why companies are key players on environmental governance to achieve a win-win situation where both the targets on environmental protection and economic development are met.

In addition to the public sector and private sector, there are several other actors in environmental studies. Berninger (2012, 154-164) brings attention to the importance of involving all the actors in carbon neutrality to ensure carbon-neutral activities become common practice. Officials, public procurements, politicians, private companies, scholars and research funding, media, artists and public figures, educators, NGOs, and active citizens all have a part to play to ensure that the global 2050 target is met. Fröhlich and Knieling (2013, 11-12) introduce the diversity of actors in climate change, pointing out how actors with multiple different perspectives and interests lead to several levels of responsibilities and duties among the actors.

2.2 Climate action: sustainability and carbon neutrality

Climate action can be determined as all the actions taken to reduce the impact of climate change, e.g., through the introduction of sustainable and low-carbon practices and reduction of GHGs.

Munasinghe and Swart (2005, 3) state how society is vulnerable to climatic change, which is why there needs to be a response to these changes, both through mitigation and adaptation.

Climate change mitigation means the intervention to reduce the sources of GHGs or enhance the sinks of GHGs, while adaptation is the adjustment of both human and natural systems for the actual and expected climatic changes. (Kongsager 2018, 3) Two concepts will be introduced in this sub-chapter; sustainability and carbon neutrality, as these are interlinked especially when discussing actions that the private sector can take to introduce sustainable and low-carbon practices.

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As stated previously, Berninger (2012, 13) emphasizes the importance of tackling unsustainable issues especially on energy production, buildings, transportation, and food, e.g., through the promotion of sustainable and low-carbon practices. This argumentation supports the ideology of sustainable development but furthermore ensures that a carbon-neutral society is achievable, too. World Commission on Environment and Development (1987) define sustainable development as development that “meets the needs of the present generation without compromising the ability of future generations to meet their own needs”. Heinberg (2010, 13) discovers that the essence of the term sustainability is that which can be maintained over time.

Both definitions show that the meaning of sustainability is that society needs to be maintained sustainably to ensure its functions and development in the long term too. This means that both the processes that generate social health and well-being, and the institutions that facilitate economic and environmental sustainability, need to be sustainable now and in the future.

(Dillard, Dujon and King 2010, 21-23)

According to Dahal and Niemelä (2016, 2), artificial carbon emissions are balanced in carbon neutrality by offsetting emissions-cutting actions and sustainable, often renewable, energy production methods. The primary carbon gas causing global warming is carbon dioxide (CO2), due to its long stay in the atmosphere and its high surface warming capacity potential, but other key GHGs include methane (CH4), nitrous oxide (N2O), and hydrofluorocarbons (HFC). As the targets for a carbon-neutral society have been set for 2050 with national targets supporting it, states take into account their income and development levels when planning the national net- zero emission targets. These targets revolve around four key actions: 1) decarbonized electricity production; 2) electrification and were not possible, switch to cleaner fuels; 3) improved efficiency, and reduced waste; and 4) preservation and increase of carbon sinks. (Fay et al 2015, 26-27) With energy efficiency, it is meant that people are doing more with less. Increasing efficiency, meaning that fewer resources, labor, or money, are used to do more, enables more sustainable growth. (Heinberg 2010, 9)

Laine, Heinonen, and Junnila (2020, 1 and 11-12) have discussed the pathways to carbon-neutral cities before implementing a national policy with the findings indicating that most of the measures set for the carbon neutrality process were outside of the city's jurisdiction with outsourcing the responsibility to private properties or national actors with broader boundaries.

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When the city does not allocate its electricity production, although it is owned by the city, significant carbon reduction potential is excluded, and responsibility is shifted. The main findings emphasize that carbon promotion and allocation should be done by the city to further support carbon-neutral city targets and to shift the responsibility back to the city, e.g., from the central government. Furthermore, Lukkarinen et. al (2020, 34) discuss how one aspect of the transformative path of energy is the need for change in the energy services market. For instance, energy companies are important enablers of the transformation of housing companies as managers of electricity and heating networks. For the time being, the service design of many energy companies does not yet take proper account of the role of citizens and energy companies as active collaboratives.

2.3 Collaboration

2.3.1 Cross-sector collaborations and partnerships

“Parties who see different aspects of a problem can constructively explore their differences and search for solutions that go beyond their own limited vision of what is possible” - Barbara Gray (1989, 5)

As previously defined, collaboration is the interaction between two or more actors who share the same desire or need to achieve a particular goal or outcome. (Owen and Larson 2017, 9-10) Collaboration requires two-way communication and actors in collaboration must meet together in the deliberative process. (Ansell and Gash 2008, 546) Deliberative decision-making is a problem-solving process where actors justify their validity claims, listen to each other with respect, and, if needed, re-evaluate their claims based on the new information and counterarguments from the opposing actor(s). (Öberg 2016, 180) Thus, collaboration is used for problems where one actor cannot solve the issue alone, and therefore collaboration is needed to either generate new information or solve a shared challenge or problem.

It is important to distinguish the concept of collaboration from the one of partnership. A partnership is an arrangement between at least two people or groups who are working together but have specific roles and responsibilities, and a set of rules, and they can be seen as more intense and deeper than collaboration. (Owen and Larson 2017, 9-10) Furthermore, partnerships enable organizations to support each other by combining their strengths and capabilities through

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collaborative advantage or synergy where resources are combined. (Andrews and Entwistle 2010, 679-680) In addition to collaboration and partnerships, the concept of network needs to be understood and differentiate from the mentioned concepts. Networks can be defined as the organizational form for the coordination of actors from different societal fields. (Schmid, Knierim, and Knuth 2015, 67) Collaborations are specific types of networked relationships;

therefore, all collaborations are networks but not all networks are collaboration. (Bryson et al 2015, 659)

Cross-sector collaboration and partnerships, cross-sector social partnerships, and social partnerships are all further used to define the collaborative action between organizations.

(Bryson et al 2006, 44 and Selsky and Parker 2005, 850) For this master’s thesis research, cross- sector collaboration is used as a term to address collaborative action that engages two or more actors in at least two different local sectors in their aims or projects to address social issues and causes. Therefore, cross-sector collaboration can be defined as partnerships between the government, business, nonprofits, communities, and the public who are either linking or sharing information, resources, activities, and capabilities between organizations either in two or more sectors to achieve the outcome not possible to be achieved in one sector separately. (Bryson et al 2006, 44) Through cross-sector collaboration, organizations jointly address challenges such as economic development, community capacity building, and environmental sustainability, and merge some of their assets to accomplish something, e.g., a solution, to social challenge. (Siegel 2010, 1)

In environmental and climate change studies, collaboration has been much studied in relevance to different types of collaborations, e.g. in community-based collaborations (Boswell 2019, Pearce et al 2009 and Sheppard 2011) and public-private collaborations (Bjärstig 2017, Ekambaram 2020 and Forsyth 2005) findings support both the opportunities and challenges that collaborative actions have. The empirical research on the factors and actors in climate change mitigation and adaptation has been studied too, e.g., by Holgate (2007), Ireland (2012), Klein, Juhola, and Landauer (2017), and Klein et al (2018). Accomplished research indicates the importance of engaging actors in climate action while ensuring continuing support by the public sector. Cross-sector collaboration is widely used in public and social challenges and is considered by scholars as a necessary strategy in public problems. Since the 1980s, collaborative

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actions have become extensive in all sectors in many states and nations. (Selsky and Parker 2005, 849)

Figure 2: Summary of the major frameworks and findings from empirical studies between 2006-2015 (Bryson et.al 2015, 651)

In Figure 2, the major theoretical frameworks, and findings from empirical studies between 2006-2015 are introduced, clearly indicating the complexity of cross-sector collaboration. There has been a large amount of research done on the topic of cross-sector collaboration especially in governance, and collaboration between sectors is nowadays seen more and more necessary when addressing social challenges. However, the arguments on cross-sector collaboration being too complex as a phenomenon to be used by practitioners; this has led to a conversation on the conceptualization of the phenomena as a dynamic system, but the question remains on how to

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respond collaboratively and effectively to problems that are majorly interconnected. (Bryson et al 2006, 44-45, and 2015, 647-8, 657 & Agranoff and McGuire 1998, 67-68)

To understand the different parts of the issue better, Bryson et al (2006 and 2015) examines cross-sector collaboration through six categories: initial conditions, drivers and linking mechanisms; collaborative processes; collaboration structures; intersections of processes and structures; endemic conflicts and tensions; and accountability and outcomes. These categories are supported by the findings of Emerson and Nabatchi (2015) who categorize collaboration in an integrative framework into initiation collaboration, collaboration dynamics, and generating change in collaboration.

The interrelated conditions serve as the base for collaboration, including aspects such as resource conditions, network characteristics, power relations, and socioeconomic characteristics. (Ibid 2015, 41) The environmental factors can be considered as initial conditions of collaboration and are used when determining the purpose, structure, and planned outcomes of collaboration. The institutional environment is important as collaborations are subject to pressure that can both affect the formation of the collaboration but also long-term sustainability;

both competitive and institutional environments can have a positive impact on the collaboration formulation but can cause restraining on long-term sustainability. (Sharfman, Gray and Yan, 1991, as cited in Bryson et al 2006, 45)

Emphasize for successful collaboration has been on using the existing networks and partnerships between actors to further build more intense collaboration between actors. (Bryson et al 2015, 655) In this, both formal and informal networks are used as collaboration exists within and across different types of networks with different levels of formalities. (Emerson and Nabatchi 2015, 211) In addition to existing networks, past relationships between actors and usage of bridge-builders provide advantages for the success of the cross-sector collaboration. During the thesis seminar on 14 December 2020, Lasse Peltonen defined bridge-builders as those individuals who already have a connection to other individuals, and these connections can motivate several participants to join the collaboration. Later on, bridge-builders can share the information of the ongoing collaboration with other parties, this way increasing the network.

Additionally, the role and characteristics of sponsors and champions in collaboration are important to note. Bryson et al (2006, 47 and 2015, 652) define these as individuals who are

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building relationships and the common purpose alongside sustaining and creating the movement of the process and shared experiences – sponsors are individuals who might not be closely involved in the daily collaboration work but have considerable authority and access to resources that they can offer, and champions are those who are majorly involved in the collaboration and offer their process skills to achieve collaboration goals. In addition to the ability to explain and frame the common issue in a way that its importance and relevance is understood by other partners, especially those who might not be as involved at the beginning of the process, sponsors and champions should possess a “collaborative-oriented mindset”. Cikaliuk (2011, 290-291) determines this as the will of individuals who can compel and entice images of the future and move collectively towards the aim of the collaboration.

The experience of working in collaboration in general or already on a specific issue can strengthen the capacity and competency of collaboration right from the beginning. Trust, actors' commitment to the issue, level, and quality of the communication, and legitimacy within the collaboration are all affecting how collaborative actions are seen by the parties. These are the collaborative processes that need to be built onto the shared understanding of the problem.

Additionally, establishing shared motivations for collaboration is important (more on sub- chapter 2.3.2). To ensure effective cross-sector collaboration, processes and structures need to work closely together; moreover, research indicates that processes and structures are even difficult to consider separately in this context because the “organizing” and “organization” are so closely interlinked in collaboration. (Bryson et al 2015, 651-654)

In this text, the focus is on the actors in collaboration, introducing concepts such as existing networks, bridge-builders, sponsors, and champions. Finding the individuals within participating actors who have the collaborative-oriented mindset and the commitment to the issue, are also those who can inspire more actors to join the collaboration. Even though the setting of institutions and structures of these institutions are an important part of the collaboration, e.g. through the set of rules and norms for collaboration (see Figure 2), the focus of this study is on actors with only some notion given on how the collaborative processes are helpful when planning and implementing public-private climate collaboration.

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2.3.2 Values, motives, and interests in collaborative climate action

Wamsler (2016, 186) discuss how collaboration and collaborative arrangements between different actors can be characterized based on the underlying motives and processes – such as individuals versus collective involvement, and monetary versus environmental rewards – while outcomes can be studied with transformative adaptation, e.g. through shared learning. The difference between collaborating parties is the context in which they operate. In this case, the actions taken by the public sector need to provide public value when more commonly private sector aims for the economic value within their actions. (Grudinschi 2014, 21 and Scheyvens et al 2016, 372) However, in collaboration, the shared values and motivations between actors need to be established to ensure better collaboration success.

Table 1: Companies motivations for collaboration (adapted from Gray and Stites 2013, 33) Motivations

Legitimacy-oriented Competence-oriented Resource-oriented Society-oriented Image, reputation,

branding

Gaining expertise Capacity building and risk-sharing

Influencing local policy development Avoiding

confrontation

Growing awareness Networking Responding local problems

With the motives, companies' motivations for collaboration and partnering can be categorized into four different orientations, see Table 1. These motivations differ based on reactivity and proactivity. The private sector has previously been operating due to obligations set by the actors causing pressure on market, social, and regulatory levels but movement from reactive to proactive operation in the environment and climate change issues has been notable in the past years. (Ibid, 380; Evans 2012, 63-64; Pinkse 2015, 218 & Gray and Stites 2013, 32-34) This shows the importance of determining and involving different sectors’ values, motives, and interests in the planning of cross-sector collaboration as companies' motivations indicate their interest in collaboration and how the public sector should present public-private collaboration.

Furthermore, shared motivation can be viewed from four interactive elements that are, in part, fostered by engagement: trust, mutual understanding, internal legitimacy, and commitment.

(Emerson and Mabatchi 2015, 65)

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As determined, the public sector aims in their actions is to enhance the public value, meaning either creating or improving the quality of something. (Moore 2013, 8) When the public sector plans the collaboration with other actors, the public value cannot be the only selling point for the collaborative actions; collaboration needs to give some value to all the parties involved.

Bryson et al (2015, 654) demonstrate that public value in cross-sector collaborations is created from each actor’s characteristic strength while overcoming or compensating for the actor’s weaknesses. The private sector enjoys specific skill sets and resources that the public sector lacks, which is why in cross-sector collaboration the parties' values need to be determined to both ensure the common goal but also involve the strengths each party brings.

Ingold and Fischer (2014, 65) show in their research that actors with similar beliefs tend to collaborate more intensely than those with distant beliefs. Furthermore, state actors who share more formal decision-making power compared to other actors, such as NGOs and interest group representatives, tend to more active, create and receive more relations from other actors, and can collaborate amongst themselves. These indicate the importance of public sectors’ role in collaboration and their tendency to already have networks between sectors, to begin with. The public sector should be able to determine the similar belief that the private sector shares with governmental bodies as this can help to plan the collaboration.

For companies, the collaboration is voluntary and uncompensated, and together with the danger of setting too ambitions collective targets from the beginning can push companies away from climate collaboration, indicating that the collaboration would not interest them anymore due to the lack of internal or external motivators. Bryson et al (2015, 647) propose that ongoing learning should be built in the design of collaboration, and the parties, especially those with most to offer knowledge and skills-wise, should be ready to commit to offering learning experiences with all parties committed to the ongoing learning. According to Schmid, Knierim, and Knuth (2015, 67), collaboration success can be studied in policy-induced innovations through the three-dimensional metric: the actors’ satisfaction with the cooperation, their perceived learning effects, and their perceived implementation capacity. The findings of the research show a current cap on transforming the knowledge into action but highlight the importance of information management, repeated participation, and inclusive and responsive collaboration practices. Bryson et al (2015, 655) conclude that collaborating parties are more

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reliable and productive once they have similar attitudes, capacities, and competencies. Concern for the common good, openness to collaboration, and interpersonal understanding are important when planning collaboration. (Crosby and Bryson 2010, 227-228)

2.3.3 Public-private collaboration in climate change

The cross-sector collaboration process often starts when public managers and policymakers realize the need for collaboration in public issues because the governmental body cannot solve them on its own or that a more efficient way could be found by the private sector, NGOs, or community parties if they are involved in the problem-solving. (Kettl 2015, 224) Public-private collaborations include the collaborative actions taken by a public organization, such as local government or a municipality, and a private company. According to Dahal and Niemelä (2016, 14), public-private sector collaborations are essential in the production of renewable energy sources and the reduction of carbon emissions. The increasing pressure within sectors is encouraging these partnerships between sectors: e.g., private companies have increasing demands for corporate social responsibility, and local governments are expected to provide more benefits and services while being more transparent in their actions. (Selsky and Parker 2005, 850-851) Examples of the opportunities and challenges found in the literature review concerning public-private collaboration in climate change are presented in Table 2, with more discussion below.

Table 2: Opportunities and challenges in public-private climate collaboration Public-private collaboration in climate change

Opportunities and benefits Challenges and risks

 Shared risk and reduced spending

 Knowledge and tool sharing

 Better transparency and accountability

 Promotion and protection of public interest

 Increased communication on the topic

 Carbon footprint on products and services

 Existing partnerships and networks

 Ensuring effectiveness and equity

 Governance and management challenges

 Different levels of commitment

 Colliding values and interests

 Confusion on service designs

 Responsibility shifting

 Trust

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 Improved compliance with government regulations/requirements

 Improved quality of services

 Sufficient resources

 Transforming knowledge into action

The need for cross-sector collaboration in climate change issues is evident especially since the carbon-neutral society 2050 target requires carbon-neutral actions by all sectors. Cellucci (2011, 67) recognizes some major benefits for public-private collaboration for the public body and these include greater efficiency, reduced spending, improved compliance with government regulations and requirements, and improved quality of services. Bloomfield (2006, 401 and 410) shares the same argument that public-private partnerships can be characterized by market-driver competition, shared risk, and transparency with the importance that collaboration promotes and protects the public interest. In collaboration, the obstacles that the public sector can view as challenging when planning a collaboration with the private sector need to be noted too, especially in situations where more focus is given on how cities can encourage private sectors’

participation in the public-private collaboration. Thus, the relevance to actors' roles and the continuation of the collaboration is needed to be considered, with the notion given that public policies must be implemented in a way that public sector personnel work is supported by the policies and overall organizational objectives and actions.

Andrews and Entwistle (2010, 679 and 683) collected data from local government service departments in the United Kingdom and noted in their research that while the public-public partnership is positively associated with effectiveness, efficiency, and equity, the public-private partnership does not enjoy the same associations. In their research, public-private partnerships in the UK were negatively associated with effectiveness and equity, and the benefits of collaboration with the private sector were only “most apparent in the efficiency dimension of performance”. While the instruments between the UK and Finland cannot be directly compared, findings from Andrews and Entwistle indicate the importance of setting the governmental objectives to support the collaborative climate action before introducing concrete actions for public-private collaboration.

Other challenges for public-private collaboration in climate change include both governance and management challenges that can risk the success of the collaboration. Bloomfield (2006, 409-410) proposes that local governments need to invest in specialized expertise who would

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protect the public interest, besides ensuring to meet the government's need for sufficient recourses. New accountability and transparency structures within the private sector but also the public at large, are needed for successful collaboration. This relates to the ideology of previously discussed sponsors and champions on collaboration whose roles and impact need to be well understood by the practitioners. As a supporting example for public-private collaboration, a priority for a carbon-neutral city target in Helsinki was given for energy efficiency within building and transportation systems, strong political commitments, and public-private collaboration. A shift from fossil fuels to renewable fuel in heating was pointed to as one of the most important actions to support the reduction of carbon emissions. (Heinberg 2010, 13-14).

However, the difference in climate action between the public sector as a large, and individual cities is highly dependent on the instruments they set according to their jurisdiction. States set requirements, such as policies, that cities are expected to support with local-level policies, but different tools are needed when promoting climate action for local small and medium-sized companies. According to Sprengel and Busch (2010, 351), companies response strategies for GHG reduction are based on company’s level of pollution, not on engagement or pressure from stakeholder groups. Small and medium-sized companies often only produce small amount of emissions, which is why building the collaboration around the promotion of emission reduction might be challenging and other engagement methods need to be explored.

Laine, Heinonen, and Junnila (2020, 1) discuss that most cities have a positive willingness to follow the national energy policy targets, showing the current commitment from cities for climate action. According to Damsø, Kjær, and Christensen (2016, 82), national and local actors share the mutual benefits of an integrated climate change mitigation and renewable energy promotion even though they often have different motives and policy tools. Here, the possibility for improved collaboration is seen if regional mechanisms are used instead of international standards. Projects on regional and municipality levels can serve to learn and create a commitment, as well as work as inspiration and help create networks between actors.

(Heiskanen et al 2017, 1) For the public sector, the development of policy tools that support the national requirements and take into account other sectors' views, is needed.

Public authorities' choices on shifting responsibility to foster both participatory and market- oriented elements of climate change adaptation have been studies by Klein, Juhola, and

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Landauer (2017, 1055 and 1069). The research indicates that public authorities highly determine where the private sector is expected to take responsibility and the notion has been made that more attention should be given to how the public sector engages private actors. Klein et al (2018, 134) recognize that responsibility shifting to non-state actors can cause inequality and vulnerability, which is why the potential consequences of policies and measures must be assessed concerning how they can affect the companies’ motivation and capacities to adapt.

When building successful collaborations, engagement methods are used to share responsibilities between actors, and recognizing these methods and tools early on in the project helps involving all the participating actors in collaboration.

According to Berninger (2012, 157-159), the private sector does have good opportunities to reduce their carbon emissions if they have given the information and possibility for that.

Examples of these opportunities include the production of carbon-neutral products and services, increases in energy efficiency, and investment in renewable energy production. Those companies who cannot invest in renewable energy can support eco-energy that uses alternative energy sources, such as renewables. Furthermore, companies should set themselves emission reduction targets, make climate change plans, and support employees to reduce their carbon footprints. Purposive carbon footprint reduction on products and services, and the wider communication on that, should be part of the construction of a carbon-neutral society. In public- private collaboration, these actions should be supported by the public sector who can help by e.g., sharing their knowledge on the issue and setting a platform for actors’ networking.

As a conclusion, the main concern in climate action involves the identified issue areas in energy production, buildings, and transportation. The lack of responsibility on cities’ end in relevance to outsourcing the production and allocation impair the public trust in their governance. The first step to solve the current confusion in service designs and roles of private companies in climate actions is for the municipalities to better define these alongside the goals on collaboration. Both climate mitigation and adaptation are important to note when planning collaboration. However, the focus in this research will be more on mitigation as this is seen as a more urgent matter and offers more options for collaborative actions between sectors within Finland.

Evaluation of Companies' Motives, Values, and Views Impact on Collaborative Cross-sector Climate Action: Case Study Imatra