Finland’s Moonshots for Green Growth

The Green Transition Is an Opportunity Finland Cannot Afford to Miss

The green transition is one of the biggest drivers for change during the current and coming decades. Globally, it is estimated that the required climate-aligned investments will total between $100 trillion and $150 trillion by 2050, representing an average of $3 trillion to $5 trillion per year. ¹ 1 Boston Consulting Group and Global Financial Markets Association, Climate Finance Markets and the Real Economy, December 2020, https://www.sifma.org/wp-content/uploads/2020/12/Climate-FinanceMarkets-and-the-Real-Economy.pdf EU regulation (e.g., Fit for 55) reinforces the transition, triggering green demand across industries. Tapping into green growth is an opportunity that Finland cannot afford to miss: over the past decade, Finland’s GDP growth has been trailing other Nordic countries ² 2 The World Bank, National accounts data and EOCD National Accounts data files, https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG and its budget deficit has increased. ³ 3 State Treasury Finland, Statistics on central government debt, https://www.treasuryfinland.fi/statistics/statistics-on-central-government-debt/

To ensure that Finland seizes this opportunity, Boston Consulting Group (BCG) and Climate Leadership Coalition (CLC) initiated the Moonshot work and interviewed over 60 stakeholders comprising company and industry representatives, researchers and academia with sustainability expertise, senior ministry officials, and representatives from the largest political parties. The report showcases how, through the five Moonshots, Finland can simultaneously drive growth and thereby well-being, reach its own ambitious climate targets, and become greater than its size in solving the climate crisis.

“Finland’s main export sectors—machinery, forest products, metals, and chemicals—will remain the same, but they need to transform within to remain competitive in the green transition.”
—Antti Herlin, Chair, KONE and Chair, Tiina and Antti Herlin Foundation

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Finland Has Several Competitive Advantages to Tap into Green Demand…

Finland has a unique starting position to be a forerunner in providing green solutions. As tangible sources of competitive advantage, Finland has valuable natural resources for the green transition, including forests (more than 75% of the country's land area is covered by forest) ⁴ 4 Metsäteollisuus, Metsäteollisuus numeroina, August 2022,
https://www.metsateollisuus.fi/uutishuone/metsateollisuus-numeroina and minerals (Finland is the only European country with access to all minerals needed for batteries). ⁵ 5 Helsingin Sanomat, Suomen talous voisi saada yllättävän vauhdittajan paljon parjatuista kaivoksista – mineraalivarantojen arvo on peräti 500 miljardia euroa, February 2018,
https://www.hs.fi/talous/art-2000005555723.html?share=19814a0856378b48fd3a8aa8143097ed Moreover, roughly 90% of power generation is already carbon neutral, and with increasing wind power capacity, the renewable energy generation is growing rapidly. ⁶ 6 Statistics Finland, Production of Electricity and Heat, https://www.stat.fi/en/publication/cku28dfkw805d0b9922uxoyep

As intangible advantages, Finland can leverage its export industries’ existing competitiveness in process efficiency and digitalization—levers needed for the green transition. The Finnish workforce is highly educated and digitally skilled with Finland ranking 1^st in the EU’s Digital Economy and Society Index (DESI). ⁷ 7 European Commission, Digital Economy and Society Index (DESI) 2022: Finland, September 2022, https://ec.europa.eu/newsroom/dae/redirection/document/88700 Finally, Finland as a nation is committed to a green future with one of the world's highest corporate SBTi engagements and one of the most ambitious climate targets in the world—climate neutral by 2035 target set in law.

…and Surprisingly Many Growth Opportunities across Key Value Chains

Finland can maximize its growth and handprint by providing solutions to the five consumer-facing value chains that account for nearly all global GHG emissions when considering end-to-end value chains from raw materials to end-of-life: Housing (~35% of global GHG emissions), Food (~30%), Travel (~20%), Fashion (~10%), and Consumer products (~5%).

The report reveals a total of 28 green growth opportunities for Finnish companies across key value chains. Common themes include, for example, innovative materials, sustainable production processes, supply chain optimization to reduce waste, sustainable product design, and more energy-efficient usage of goods and services.

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The Five Moonshots for Green Growth

The report identifies five Moonshots for green growth to future-proof Finland's existing export sectors and create new industrial mainstays, having a total export potential of €85 billion to €100 billion by 2035. The identified Moonshots lean on Finland’s lasting competitive advantages and have the potential to help the country make significant leaps in terms of exports and carbon handprint.

In addition, the Moonshots are not the province of one or two companies but of a larger stakeholder ecosystem, bringing businesses in the value chain together and leveraging academia and research institutions. Finally, the government can play a role as a catalyst, enabling the Moonshots to realize their full potential.