To avoid the most serious effects of CO2 emissions and climate change, a tectonic shift is necessary — now.
This year Hexagon celebrates 20 years since we launched a new strategic direction that would redefine our future. The last two decades have flown by, and much has happened — both in terms of Hexagon’s evolution, and in terms of the world around us.
Not surprisingly, our perspective and objectives have changed, and comparing where we were that first year with where we are today says a lot about how far we’ve come.
In 2000, I was tasked with saving a company.
In 2020, we want that same company to save the world.
On the surface, that’s an enormous shift. But over the last 20 years we weren’t just saving a company’s financial fortunes, we were building on a vision of creating something unique and enduring.
Ultimately, we wanted Hexagon to help customers solve their most challenging problems by putting data to work. And while we were becoming pretty good at that, something else happened — the world did not stand still.
Global GDP has nearly tripled, from 34 trillion USD in 2000 to 88 trillion USD in 2019. At the same time, world population increased by nearly 2 billion. To keep pace, humanity went from extracting 50 billion metric tonnes of natural resources from the Earth in 2000 to a whopping 92 billion in 2019.
A massive shift like this doesn’t come without consequences. Scientists warn that we are burning through the resources of two earths, and last year we saw the highest levels of CO2 emissions in history — nearly 38 billion metric tonnes. That’s an increase of over 55 per cent since 2000.
The future is governed by how the present manages the past
While many companies talk about achieving carbon neutrality by 2050, we believe this crisis needs to be addressed today. We can’t let perfection be the enemy of good.
A fellow CEO said recently “…even if only a fraction of the science is right today, this is a much more structural, long-term crisis.” We agree. The environmental crisis is systemic, and it’s creating an entirely new economy. We call it the sustainability economy and we believe it may be the biggest business opportunity of the 21st century.
With the tailwinds of 20 years of growth, we’ve come roaring into the ‘20s once again, reminiscent of a century ago. To quote the famous last line from The Great Gatsby: “So we beat on, boats against the current, borne back ceaselessly into the past.”
Like the 1920s, this decade has all the hallmarks of a great business opportunity — fast-growing demand, extreme pressure on profits, new regulatory constraints, increased accountability, shareholder demands and competition from new entrants. But it also carries some sobering and undeniable risks.
It’s ironic that much of what we were creating in the 20s of a hundred years ago, we’re trying to undo today. Truth is, we’re at a unique moment in history. The next 30 years are crucial if we’re to address the world’s sustainability risks. To avoid the most serious effects of CO2 emissions and climate change, a tectonic shift is necessary — now.
There is some good news. Until recently the costs of sustainability initiatives were considered detractions from profitability. But companies have begun to realise that their own success depends more and more on the ability to address the broad array of issues impacting the fragile world in which we now live.
We believe Hexagon will play a key role in ensuring business prosperity continues while corrections are made to reverse the excesses that have fueled our economic growth. Our entire purpose is focused on empowering our customers to put data to work to increase efficiency, quality and productivity wisely —the antidotes to resource depletion and waste.
While it’s become cliché for leaders to say do well by doing good, we think the opposite is true — that we will do good for the Earth by doing well in our businesses — do good by doing well.
Put data to work for our shared purpose
Today, harnessing the power of practically unlimited data is fraught with complexities of epic proportions. It’s easy to get caught in a web of untouched, unleveraged, unanalysed data. If companies are to truly turn data into a competitive advantage, they must be able to put it to work autonomously, behind the scenes, without the aid of human decision-making.
We believe this is a goal worthy of our entire focus and energy that will drive growth and shareholder value for years to come. It’s also something we’re adeptly positioned to deliver due to our deliberate business focus — one centered on sensor, software and autonomous solutions built from a collection of core capabilities unique to us.
While most think of autonomy as something that will drive our cars, we believe it will do so much more. It will protect our cities. It will improve our climate. It will make fossil fuels cleaner, mining safer, manufacturing more efficient, buildings smarter, and the future brighter for the next generation. So, while you might find saving the world bold and audacious, I see it as the only rational course of action for all business leaders. I’d like to ask all of you around the world to commit to this shared purpose: Let’s begin, now, today, to put data and human ingenuity to work to ensure that both humanity and sustainability thrive.
It’s the best business decision we’ll ever make.
Stockholm, Sweden, March 2020
This blog was originally published as Mr. Rollén’s “Letter from the President and CEO” in Hexagon’s Annual Report 2019.