Why Hexagon places sustainability at the core of its business

Author: Maria Luthström

Earlier in 2021, Hexagon launched a new sustainability programme. Maria Luthström, head of sustainability and investor relations, will be responsibible for driving the company’s environment, social and governance (ESG) agenda.

As the Head of Sustainability, you’re spearheading Hexagon’s sustainability efforts. How did your passion for sustainability practices begin?

Maria Luthström: After graduating from university nearly 15 years ago, I started as a trainee at a large, family-owned company in Sweden. The owners were very focused on sustainability which shaped my views. I was inspired by the company’s head of sustainability, a former politician. Being involved in a lot of sustainability projects at that group — and leading many of them — allowed me to gain valuable experience. I implemented sustainability frameworks such as the Global Reporting Initiative. At the time, that was very new, and nobody at the company had any prior knowledge or experience of the topic. We didn't hire consultants either, so I had to do my own research to implement it. I learned a lot by doing that.

Earlier this year, Hexagon announced the launch of a new sustainability programme with key environmental, social and governance (ESG) goals centred around carbon emissions, supplier audits and gender diversity. Why is Hexagon making sustainability a core aspect of its strategic focus?

I think everyone should make sustainability a focus — but corporations have a particular responsibility: They are profit-driven and must abide by market principles, so they have an opportunity to drive real change. That's why our mantra "to do well to do good" is so important: Companies must become sustainable while still achieving their business goals. We have to achieve sustainability in a cost-effective way. Otherwise, it won't stick.

What is Hexagon doing that's unique and different?

We are in a special position because Hexagon's core business is already an enabler of sustainability: We're focused on improving efficiency, productivity, quality and safety for our customers. And that’s also how we're supporting their sustainability journeys. Sustainability is really at the core of what we do, and we are able to pull our client companies in various industries along.

Also, the business venture R-evolution is fantastic and unique. We will invest in green-tech projects where Hexagon’s technology can be applied. It's business-driven and shows that helping the world transition to a new greener economy is an opportunity. Sustainable, profit-driven projects can propel society toward that vision. We're currently investigating whether putting solar panels on-site is feasible in some of our larger facilities. An alternative would be to buy power purchase agreements where we'd invest in the build-out of renewable energy, which we can then use to power our facilities.

How do you cultivate an environment that values and promotes sustainable practices at Hexagon?

We already know that many employees are passionate about sustainability, and that is crucial. It’s important with the bottom-up approach. But we’re aware that the support and the commitment must also come from the top. Sustainability must be part of business planning and a recurring topic in strategy sessions and communications.

Do you establish ESG objectives at the employee or management level?

At the beginning of the year, we defined overarching targets: Our ESG targets include carbon neutrality in our scope 1 and 2 emissions by 2030; carbon neutrality across our entire value chain in scope 1, 2 and 3 emissions by 2050; sustainability supplier audits across 100% of our direct suppliers in risk areas by 2023; and at least 30% of our leadership positions filled by women by 2025. Those targets are very high-level, of course. We are now breaking them down into more granular objectives and activities to help people grasp what they mean for their roles.

Can you share what measurements the company will implement?

We’re increasing energy efficiency across our facilities, reducing carbon emissions from business travel and company fleets. We will also increase our focus on sustainability during the product design phase, implement stronger supplier audit processes and launch initiatives that build and nurture an inclusive culture while attracting and retaining diverse talent. I’m excited that some divisions are rolling out their own initiatives, for example mentoring programs to increase the percentage of women in leadership. I’m hoping to extend such programs to the rest of the company.

Where do you see challenges?

Our organisation is decentralized, so the decision to adopt a company approach to sustainability will make a big difference. The divisions will drive their own sustainability agendas, but there is a joint commitment. We’ve also set up expert groups within operations, procurement, HR and compliance. These groups include members from each division. They develop sustainability initiatives in line with their operational contexts and goals and the progress is reported quarterly to the president and CEO Ola Rollén and Hexagon’s board of directors. That’s how we ensure that sustainability initiatives across the company align with the overarching goals.

Is there a company out there that you want to emulate?

We do look at best practices within other companies. Some companies with a larger environmental footprint have been under pressure from stakeholders to become more sustainable for some time. Those companies’ frameworks are usually more advanced. Compared to those companies, we don’t have a big carbon footprint. We don’t have large production facilities, for example. For tech companies, other challenges may be more obvious. The industry is very male dominant, and that’s something, we need to break. We're also focusing on our supply chains where human and labor rights can be an issue in some areas. Assessing our suppliers’ sustainability is an important step.