When Matti Lievonen became the CEO of Neste in 2009, the Finnish oil refining company was facing strong headwinds – a sharp fall in oil prices, market overcapacity, falling margins and new carbon emissions legislation in the EU. The company’s market value dropped 50% between 2008 and 2011. Matti had to implement a radical strategic shift into renewable fuels.
NESTE CHALLENGES OVER THE YEARS
Neste faced multiple challenges over the next seven years to implement its renewables strategy.
“In practice, our business based on renewable products and circular economics is eating away at our traditional business operations. This is a sacrifice that many did not believe in at first. But when it comes to the question of what kind of planet we will leave to future generations, the transition to sustainable lifestyles cannot be held back.” Matti Lievonen, President and CEO of Neste
The L&D initiatives
IMD and Neste collaborated on four L&D programs to enable the company’s transformation journey. The strategy implementation and organization development process required Neste to examine where it had come from, where it was at each stage and its ambition as a sustainability champion.
Throughout the Neste-IMD collaboration, the company has seen significant growth in its renewables business, profitability and market valuation.
To find out more about this collaboration, please download the full report.
Neste’s journey from a Finnish oil refining company to the world’s largest producer of renewable diesel from waste and residues has required a bold transformation. Its renewable diesel, based on proprietary NEXBTL technology, can reduce greenhouse gas emissions by up to 90% compared with fossil fuels. Replacing fossil fuels with Neste’s renewable fuels reduced global climate emissions altogether by 8.3 million metric tons in 2017. This figure equals removing 3 million passenger cars from the roads for a full year – more than the number of cars in London, UK. Beyond road traffic, Neste brings renewable solutions to the aviation, plastics and chemical industries. Its turnover in 2017 was €13.2 billion with operating profits of €1.1 billion. For 12 consecutive years Neste has featured in the Global 100 list of the world’s most sustainable companies, ranking second in 2018.
IMD is a top-ranked business school, expert in developing leaders, transforming organizations and creating immediate and long-term positive impact. IMD custom programs are co-created with a select group of innovative global organizations to address their specific performance objectives. These tailor-made programs help companies to build new capabilities and address their most significant business challenges. The programs blend academic expertise with hands-on implementation and are designed for learning and business impact.