1. Introduction

The Nordic countries are widely recognized as global leaders in addressing climate change. Their commitment to mitigating climate change is characterized by ambitious national targets, by proactive measures to reduce greenhouse gas emissions in all sectors of the economy, and by strong support for research and technology. Each Nordic country has pledged to achieve carbon neutrality well before mid-century; Norway has set a target of becoming carbon neutral by 2030, Finland aims for carbon neutrality by 2035, Iceland by 2040, and Denmark and Sweden by 2045. Through national climate action plans, each country is actively working to accelerate the transition towards a low-carbon and fossil free economy (Nordic Council of Ministers, 2023).

1.1 Climate law and policy framework

Governmental climate efforts in all the Nordic countries are based on two pillars: European climate law and policy, and national climate law and policy. The European Union (EU) is committed to achieving carbon neutrality by 2050, aligning with the vision outlined in the European Green Deal, which was approved in 2020 (Council of the EU and the European Council, 2024). The European Climate Law, adopted in 2021, enshrined the climate neutrality target, along with an interim target of reducing greenhouse gas (GHG) emissions by 55% by 2030, compared to 1990 levels.

To meet these objectives, the EU has established a comprehensive framework of legislation and policy, recently updated through the Fit for 55 package. This framework includes binding national targets for each EU Member State under the EU Effort Sharing Regulation (ESR), which covers emissions from road transport, buildings, agriculture, waste, and small industries. Member States are also committed to reducing net GHG emissions from the land-use, land-use change and forestry (LULUCF) sector, and to participating in the EU Emissions Trading System (EU ETS). In order to stimulate the private sector contribution to climate action and to harmonize market conditions, the EU has furthermore implemented various rules in the fields of climate and energy, including recent advancements in the legal framework on sustainable finance (European Commission, 2024).

Each Nordic country has enacted its own national general framework climate legislation, outlining long-term national climate objectives and the decision-making procedures intended to achieve them. Such legislation typically requires the government to develop and regularly update comprehensive climate action plans covering all sectors of the economy. General framework climate legislation is increasingly recognized as a vital component of effective national climate policy. By codifying long-term targets, such legislation provides important signals for businesses and households as to the direction, pace, and extent of structural change needed to achieve national climate targets. This creates confidence, increases predictability, and facilitates informed decisions on investment and behavior (World Bank, 2020).

1.2 Public-private collaboration for green transition

Achieving carbon neutrality requires profound societal and economic transformations, including the transition from fossil fuels to renewable or clean energy across all sectors, the deployment of new technologies in various industries, and new approaches to food production. Both the Intergovernmental Panel on Climate Change (IPCC) and the Paris Agreement acknowledge that global climate objectives demand rapid transformation across all societies and sectors, and that this calls for the utilization of all available channels of climate financing (IPCC 2022). This report will refer to this transformation as the ‘green transition’.

While the costs and efforts required are substantial, the green transition also presents opportunities. Governments have increasingly sought ways to mobilize private capital for climate action and to stimulate necessary behavioral changes by fostering an enabling environment for climate-friendly business investment. An example is provided by the 2019 Helsinki Principles adopted by The Coalition of Finance Ministers for Climate Action, which recognize the green transition’s potential to benefit societies by driving technological innovation, improving human well-being, and accelerating economic growth (The Coalition of Finance Ministers for Climate Action, 2020).

In addition, effective collaboration between the public and private sectors is widely acknowledged as crucial to accelerate the transition towards carbon neutrality and a sustainable economy. In 2021, the EU adopted the EU Climate Law, its climate change framework legislation that includes a commitment by the Member States to engage with all sectors of the economy to develop sector-specific roadmaps charting the path to climate neutrality in various economic areas.

This approach has garnered significant support from private sector actors. For instance, during the negotiations for the EU Climate Law, The European Round Table for Industry (ERT), a forum comprising approximately 60 Chief Executives and Chairs of leading multinational companies in Europe, publicly endorsed EU’s 2050 carbon neutrality target and stressed the necessity of introducing indicative sectoral roadmaps to reduce GHG emissions in Europe. In a February 2021 statement, the ERT outlined the opportunity it saw in such roadmaps, envisaging that:

’Sectoral Roadmaps would provide a strategy and “soft” policy guidance intended to:

Deliver policy coherence for sectoral decarbonisation, ensuring an EU-wide approach and complementing the revised EU legislative framework;
Synchronise policies to create sectoral markets for clean energy, build infrastructure and deliver supply;
Support the EU’s goal to gain competitive edge by being a first mover in the development of industries including the technologies that will enable the energy transformation and Europe’s growth strategy;
Offer sectoral platforms to engage all relevant actors to identify measures and pathways to reach Net-Zero Emissions in an open and transparent way;
Be flexible and adaptable to allow for advances in climate neutral technologies as a general orientation tool rather than a planning exercise;
Provide clarity to investors on the measures, aid investment and competitiveness support in order to mobilise the necessary investment in relevant industrial ecosystems’ (ERT, 2021).

1.3 Nordic government-led climate collaboration initiatives

Nordic governments have emphasized the importance of involving the private sector in achieving climate targets, including through sectoral climate roadmaps. The Helsingfors Declaration on Nordic Carbon Neutrality, adopted by the Nordic Prime Ministers and the Ministers of Environment in 2019, strongly emphasized the role of the industry and business sectors in climate action and the necessity of incentivizing climate-related investment in the private sector. The declaration highlighted the need to ’enable Nordic industry and business to take a leading role in the green transformation of the global economy’ (Nordic Council of Ministers, 2019).

While each Nordic country has initiated specific measures to stimulate private sector climate efforts, they have taken different approaches to involving the business and industry sectors in public policymaking. The report The Road towards Carbon Neutrality in the different Nordic Countries, published by the Nordic Council of Ministers in 2020, provided an overview of how governments in the Nordic countries had, at that time, sought input from business communities to contribute to national plans on carbon neutrality and GHG reductions. The report described such sectoral partnerships and roadmaps as ’cornerstones for the Nordics to reach carbon neutrality’ and asserted that these partnerships ’play a critical role ensuring sector action and commitment to identify the most effective roadmaps’ (Nordic Council of Ministers, 2020, p. 65). Furthermore, the report emphasized the need for increased knowledge sharing about best practices in other Nordic countries regarding sector engagement in national efforts to achieve carbon neutrality.

Building on the findings of the 2020 report, the present report seeks to further explore and compare selected public-private collaboration initiatives that have emerged in individual Nordic countries in recent years. Currently, governments in all Nordic countries have established some type of formal cooperation with various business and industry sectors, nearly all of which have resulted in the development of sectoral roadmaps for climate mitigation efforts in coordination with public authorities. These roadmaps vary in scope, content, and role in each country’s national climate governance. This report serves as an opportunity to study these roadmaps and gather information on the actual experience of participants and stakeholders.

1.4 Objectives and scope of this report

The primary objective of this report is to analyze and compare the diverse strategies adopted by Nordic governments as they engage with the business and industry sectors in pursuit of national climate targets. The report primarily focuses on five specific government-led initiatives in Denmark, Finland, Iceland, Norway, and Sweden. While these initiatives differ, each is designed to promote and facilitate climate-related collaboration between the public and private sectors, and to stimulate the development of sectoral roadmaps intended to organize and prioritize measures aiming to achieve carbon neutrality. The examination of these specific examples is intended to highlight the varied characteristics of the approaches taken by each country and to shed light on how each initiative has been perceived by participants from both the public and private sectors. In this way, the project is expected to contribute to a better understanding of the possibilities and challenges of such collaborations.

The initiatives chosen as the main subjects of research for this project are:

Denmark: Climate Partnerships (Klimapartnerskaber)

Finland: Low-Carbon Roadmaps (Toimialakohtaiset vähähiilisyystiekartat)

Iceland: Business Climate Roadmaps (Loftslagsvegvísar atvinnulífsins)

Norway: Business Climate Partnerships (Klimapartnerskap með næringslivet)

Sweden: Fossil Free Sweden (Fossilfritt Sverige)

These initiatives have been selected as the subject of this report, being examples of specific government-led efforts to involve the private sector in achieving national climate targets. However, it is essential to emphasize that climate action in each of these countries involves a complex and dynamic interplay among various public and private actors. The initiatives selected represent only one aspect of the broader climate policy landscape in the Nordic region. Their examination is not intended to provide a comprehensive overview of how Nordic governments engage the private sector in climate action, but rather to showcase different approaches that can be employed to encourage public-private collaboration on climate issues and to draw lessons from experience already gained.

By highlighting the distinctive features of these Nordic initiatives and gathering insights into how they have been perceived by a range of stakeholders, the project aims to make a meaningful contribution to the ongoing development of public-private collaboration on climate action within the Nordic region. Additionally, it is hoped that the project can serve as an inspiration and reference point for other countries seeking to engage the private sectors in the pursuit of climate targets.

1.5 Methodology

To gather information about each Nordic country’s approach, a desktop study was conducted between December 2023 and February 2024. The research primarily involved collecting information from available reports and websites concerning the selected initiatives. Information was also gathered from reports published by the Nordic Council of Ministers addressing similar themes, as well as from reports issued by other international bodies.

In addition, in-depth interviews were conducted with selected informants from each Nordic country in order to gain deeper insights into the initiatives, best practices, and lessons learned. The informants were chosen with the assistance of government sector contacts in each country. To ensure a balance between the public and private sector, one informant representing each was interviewed from each country. Furthermore, a survey was sent out to key participants of the initiatives.

The interviews and survey were conducted online between February and April 2024. The interviews followed a semi-structured format, with a set of open questions sent beforehand to interviewees. The survey was administered through a web-based platform and distributed to relevant public and private sector participants. Participation in the survey varied among Nordic countries, with notably lower participation in Norway and Finland compared to the other three countries.

To maintain confidentiality, interviewees, survey respondents, and individuals contacted will remain anonymous and will generally be referred to as ’informants’.

The report was written by Hrafnhildur Bragadóttir, who also conducted the interviews.