Sweden, Sustainability and the Future

By Samantha Alexander

Why Sweden? Why is the third-largest country in western Europe universally recognized as the world leader in sustainability? The short answer is because the country made it happen, investing in renewable energy well before most of the world caught on and committing to sustainability through recycling and other practices.

The proof? Switzerland-based investment group RobecoSAM recently completed a study of 59 countries, ranking them on a variety of environmental, economic, and political factors: Sweden placed first, earning top scores on sustainability issues including the use of renewable energy and reducing carbon emissions. It found, among other things, that Sweden gets the highest percentage of its energy from renewable sources.

It started in the 1970s, with the country's response to the oil crisis – Sweden invested heavily then in alternative energy. It got more than 75 percent of its energy supply from oil in 1970, according to the Sweden.se, the country's official website. Forty years later, that number was 32 percent, with large contributions from biofuels and hydroelectric plants. It now gets 45 percent of its energy from renewable sources and plans to hit 50 percent by 2020, the Swedish Energy Agency says.

Why would an investment company care? Because, like insurance providers, it evaluates risk as part of its business model. It's not a coincidence that RobecoSAM also found that companies ranking high in sustainability also reported lower insurance premiums.

Everything doesn't come from the government, though. Clothing retailer H&M is a global leader in using organic cotton in garments; car maker Volvo is testing a fleet of plug-in hybrid buses that it says reduces fuel use by 75 percent compared with diesel buses; and furniture retailer IKEA is a leader in solar energy.

IKEA is exporting its commitment to solar power as well. In late summer, it announced that it had installed 500,000 roof solar panels on its buildings in nine countries, and its chief sustainability officer said the company likely would double that number within three years – already, more than 85 percent of its U.S. stores have panels.

It's part of an increased awareness in the U.S. of the viability of sustainable commercial construction. According to the U.S. Green Building Council, the green building market for non-residential construction is expected to reach $96 billion in 2013. And a 2013 report from McGraw Hill Construction and Waste Management predicts that more half of all U.S. retail projects and nearly two-thirds of hotel projects will be green by 2015.

Some reasons are obvious: commercial green buildings usually offer a big return in energy savings. But there's another reason for companies to build green that's not so obvious. Insurance experts say that LEED and other types of sustainable building certifications lead to a lower risk of insurance claims, which can lead to lower premiums.

What makes green buildings more attractive to insurers? They are safer and more durable. A report released in 2011, produced by the U.S. Green Building Council and the University of Michigan, suggests that green buildings are more resilient than buildings with standard construction. The study outlines the fact that efficiency-focused features may help green buildings ride out both long-climate shifts and short-term disasters such as floods or high winds.

Bigger than buildings

Around the globe, several efforts are underway to build "green cities." In the United Arab Emirates, near Abu Dhabi, the city of Masdar is taking shape. Begun in 2007, the city sits on a 23-foot-high concrete base. The base is designed to provide greater access to winds, which will reduce the need for air conditioning by cooling the city. Gasoline-powered cars won't be allowed, and electricity will be generated by solar power and a hydrogen plant.

When construction is finished in three years, the city is expected to need about 25 percent of the energy supply of similarly sized cities.

Later this year, another sustainable community, Aspern, is being launched in the suburbs of Vienna, Austria. Among the developers is the German energy company Siemens, which is combining what it calls "intelligent traffic solutions" with green building and water management strategies. The goal is to make the city sustainable for what is expected to be a population of 20,000 by 2030.

But in some ways, they're all still catching up with Sweden. The Hammarby Sjostad community of Stockholm is scheduled to be completed in 2017. It's a showcase for environmentally sensitive building and living that will house about 26,000 residents in 11,500 apartments.

What makes much of this even more exciting is that entrepreneurs have discovered the financial benefits of sustainability and going green. That's the best news for sustainability of the sustainability movement itself.

Samantha Alexander is a contributor to the HomeInsurance.com Blog. The HomeInsurance.com blog serves as a resource center for insurance consumers and homebuyers across the country.

[image credit: Phil Price, Flickr cc]