The Nordic business model: Can long-termism drive sustainable change?

Companies are operating in an era marked by economic volatility and geopolitical tensions and often feel pressured to navigate short-term challenges while remaining committed to long-term goals. As companies are also a vital contributor to society, they are expected to drive the sustainability agenda forward. Making true progress means moving beyond impact management and defining their part in driving positive, sustainable change – and this is easier said than done.

Short-termism vs. long-termism

The tension between short-term gains and long-term goals presents significant challenges for businesses. Short-termism, driven by shareholder pressure and profit targets, can lead companies to prioritise immediate results over enduring change. This can reduce sustainability to token efforts, greenwashing campaigns, one-off carbon offsets, superficial commitments, and inadequate follow-through – and potentially result in missed opportunities to address systemic challenges that require longer-term investments, such as resource scarcity, climate change, and biodiversity loss.

By investing in innovation, infrastructure, and partnerships that align with durable environmental and social goals, businesses can drive positive impact on the current issues related to people, nature, and climate. Long-termism offers a path to sustainable development, enabling companies to prioritise enduring value over short-term profits.

Nordic business model fosters long-termism

To better align profit with purpose, businesses must rethink their business models, structures, and culture to better address current challenges and adopt a long-term perspective. The Nordic business model, based on cultural commonalities across the Nordic countries, exemplifies this approach, rooted in collaboration, trust, sustainability, and resilience, offering a blueprint for balancing immediate pressures with lasting impact.

While potentially also applicable to other business models, three key principles underpin the Nordic model:

• Deep-rooted trust and stakeholder collaboration: Fostering a culture of equality and openness enables stronger stakeholder relationships. Instead of focusing merely on shareholder returns, Nordic companies engage a broad set of stakeholders, including employees, local communities, and environmental groups, to ensure sustainable growth.
• Sustainability as a guiding principle: The Nordic region’s commitment to environmental stewardship better ensures that decisions prioritise future generations, with many Nordic businesses integrating sustainability into their financial models, measuring success not only by revenue but also by carbon neutrality, circular economy practices, and biodiversity impact. This helps safeguard businesses against regulatory risks and shifting consumer expectations while reinforcing resilience in an era of climate uncertainty.
• Stable governance models: Enterprise foundations, common in the Nordic region, promote reinvestment in innovation, employee welfare, and societal contributions over short-term profits. These enterprise foundations act as stewards of a company’s mission, ensuring that profits are reinvested into research, employee welfare, and sustainability initiatives. Ultimately, this helps shield companies from volatile financial markets, but also creates a stable environment for long-term planning and investment.

Long-termism in practice: Lessons from a foundation

Enterprise foundations ensure that profits are reinvested into research and development, sustainability initiatives, and employee wellbeing. These companies are better at long-term thinking as they are less influenced by market pressures and short-term shareholder demands, empowering them to focus on innovation and sustainability. Foundation-owned companies are often mission-driven, with mandates that align with global sustainability objectives.

Ramboll is an example of a foundation-led company that reinvests profits into innovation and sustainability goals rather than short-term shareholder returns. Ramboll’s global commitment is focused on supporting a precautionary approach to environmental challenges and working to reduce the company’s own adverse environmental impacts on the planet. Being owned by the Ramboll Foundation , the company can prioritise long-term, purpose-driven decisions, supporting environmental initiatives and creating a lasting, positive impact.

“The foundation-based ownership of Ramboll has a long-term perspective, where our values take priority over other interests. It is the Foundation’s greatest purpose to uphold and cultivate the values and legacy on which Ramboll was founded as a constant and recognisable way of doing business and engaging with stakeholders,” says Søren Staugaard Nielsen, Managing Director of the Ramboll Foundation.

Learn more about the Ramboll Foundation here

Why long-termism matters in uncertain times

Companies that prioritise long-term resilience over immediate gains are more likely to remain competitive in the face of disruption. Long-termism works by helping companies to:

• Build adaptive business models: Investing in resilience strategies, such as diversified supply chains, digital transformation, and climate adaptation, helps businesses withstand economic shocks. For example, businesses that proactively invest in renewable energy and resource efficiency not only mitigate environmental risks but also secure long-term cost savings and regulatory stability.
• Invest in future innovations: Long-term thinking encourages investments in sustainable technologies, renewable energy, and green infrastructure, offering a competitive edge. Organisations that prioritise research and development, rather than focusing solely on short-term cost-cutting, can be more adept to develop breakthrough technologies and solutions that keep them ahead of the competition.
• Maintain trust during crises: Companies that prioritise investment in long-term goals may be more likely to retain employee loyalty, customer confidence, and investor support during uncertainty, and financial and macro-economic crises.