Sustainability Master Class - Diving into customers’ operating environment

Launched in December 2016, the Sustainability Master Class is jointly run by the University of Helsinki and Outotec to fuel innovation by activating an interdisciplinary group of 45 young researchers and professionals. Two of Outotec’s mentors involved in the program, Susanna Horn, Sustainability Development Manager, and Markku Uoti, Senior Manager – Risk Management, explain the background and goals behind the program.

The Sustainability Master Class is mentored by business and technology experts who define real-life business challenges and opportunities for the class to consider and constantly support participants’ co-creation work.

Themes including social license to operate (SLO), technology leapfrogging and disruptive business models create the backbone for the four-month program, as risks and opportunities that characterize our industry.

“Outotec’s legacy is widely understood as an equipment supplier,” explains Markku Uoti. “However, in recent years our strategy has heavily underlined customer-centricity and service business, so our customers’ daily operating challenges are now our challenges too.”

The University’s entrepreneurial community Helsinki Think Company and the Demos Helsinki think tank are facilitating the process.

From compliance to strategic sustainability

When defining themes for the program Outotec chose to approach the entire value chain – from minerals to refined metals.

“Focusing only on our own operations and their sustainability might lead only to limited improvements in comparison to the greater potential along our entire value chain,” says Susanna Horn. “This is why we broadened the horizon to cover the customer’s perspective as well. The participants will become familiar with the sustainability of the whole industry.”

Many of Outotec’s customers today face sustainability-related concerns, from excessive water and energy consumption to environmental hazards. According to Markku Uoti, who works with risk management issues at Outotec, companies in the mining and metal processing industries are characterized by different maturity levels and attitudes when it comes to handling these risks.

The most advanced companies do not only seek to comply with regulations, since they also want to be forerunners and redeem their SLO – while at the same time benefiting from resource efficiency, and thereby gaining a competitive advantage.

“These customers expect us to be their trusted partners, who can lower their operational risks and their water and energy consumption,” adds Horn. “This means considerable economic savings for them, as well as environmental benefits. We at Outotec hope this group will grow in the future.”

At the other end of the spectrum there are players – especially in developing countries – who operate at the lowest possible costs, and sustainability may not be their first priority when dealing with water and tailings, for instance. Local communities may consequently suffer from environmental impacts such as bursting dams and contaminated drinking water.

This gap leads to the concept of leapfrogging, which is one of the challenges being addressed by the Sustainability Master Class: Could there be ways to accelerate the development of such negligent operations by enabling them to skip less efficient and more polluting technologies and move directly to more advanced solutions?

One commonly used leapfrogging example is energy production: countries with low development levels should not imitate developed countries by constructing expensive energy infrastructure based on the use of fossil fuels, but instead "jump" directly into a modern energy infrastructure, enabling a wider diversity of energy sources to be used.

Opportunities for leapfrogging

SLO and leapfrogging often go hand in hand. “Mining companies often justify their investments by promising wealth, jobs and infrastructure, but locals remain concerned about the environment”, explains Uoti.

Technology leapfrogging may help in many ways, but it cannot alone be the solution where problems include the social impacts of business activities, such as low wages, child labor or political issues.

Could the Master Class participants find ways to build a new kind of stakeholder dialogue? Knowing the complexity of these issues, Outotec is looking forward to fresh ideas and out-of-the-box thinking, to challenge the status quo. The value of fresh and interdisciplinary thinking on sustainability issues has been a major factor behind our participation in this program.

Sustainability from disruptions?

The best ways to improve sustainability could consist of strategic changes and innovations that may be disruptive in operational terms. The Master Class participants were therefore assigned to think about potentially disruptive business opportunities that could positively shake up the relatively conservative metals and mining industry.

Disruptive business models are innovations that create new markets or make existing ways of doing business obsolete, by being safer, more efficient or less costly, for instance.

In Outotec’s field of business, digitalization can loosely be considered disruptive: Plants can be operated remotely without people, and resource efficiency can be increased by following the production process automatically in real time. This already enhances both efficiency and operational safety. But the industry is also anticipating further benefits.

In early 2017 the program has already continued with a science camp. It will next move on into a phase of experimentation, and ultimately to the pitching phase, where challenge outcomes will be presented in seven-minute sessions in early April. The outcomes will be reported in our Sustainability Report 2017.

“I have been delighted to see how well participants have embraced these topics, and I can’t wait to see the outcomes,” says Horn.

 
Challenges:

  1. Create a new solution (a practice or a model) that will enable companies to earn their social license to operate (SLO) in different contexts.
  2. Develop a new sustainable business model that would disrupt the mining industry
  3. Develop a model, practice or service that supports or enables leapfrogging to clean technology in the mining industry in developing countries.

The Sustainability Master Class can also be followed through a blog