Francois Marine and Offshore’s Mikael Karlsson tells MT how sustainability is the platform from which its client partnerships are built
Mikael Karlsson is a man on a mission – a mission towards a sustainable future. Against a backdrop of geopolitical unrest, framed by the US's decision to exit the Paris agreement, and the bilateral sanctions threatened between Trump's administration and China, the shipping industry is making inroads into years of ingrained indifference toward sustainability. Karlsson, whose organisation Francois Marine and Offshore has a clear and obvious plan to play its part, is one who is social conscience helps inform his work mandate. At IMPA London, he wore a suit made of 40% recycled plastic and a bracelet made of bottle caps. These are not, he says, to do directly with saving the planet, instead, they're reminders of the part we as individuals can play. Of course, his remit goes far wider, and as one of the major players in the maritime supply chain, Francois has a big responsibility, but it is not one that is felt too keenly by those on the ground.
Francois is part of the Northern Marine Group, which has a reputation for its approach to sustainability. For Karlsson – who took up his role as Francois's Group Head of Sales in 2018 - it is a breath of fresh air, that makes a responsible business that much simpler.
“It is engrained in the culture here,” Karlsson says. "During board meetings, we have a single chapter called sustainability; where we in management are asked to keep progressing on sustainability goals. It can be plastic recycling; it can be zero-emissions; it can be no use of plastic. And we continue down that pathway to other suppliers, explore opportunities and within the businesses what can be achieved. I think we as a company are pushing forward because we are being pushed by our owner.”
Cheap talk is the bane of the sustainability movement. Across all industries, empty promises and false starts have beset even the most robust of initiatives – take Trump’s stance on the Paris accord, for example. Yet, amid a lot of chattering and hot air, the veil of cynicism and doubt is lifting from the shipping industry, and we are starting to see action accompanying all that talk.
IMPA ACT, for example, continues to build steadily since its launch in 2013, encouraging companies to adopt responsible supply chain management (RSCM) practices. “It is a sign that things are changing for the better”, Karlsson says. So what has changed? “It is a big cultural shift, but I do see the industry gradually coming on board with this. We are starting to realise that the up-front cost of sustainability is far less than the long-term cost of not doing anything, of working with harmful or disreputable suppliers or partners.
“Of course, there will always be people who downplay things like global warming and the need for ethical supply chains, but the reality is that most of the world is starting to take notice of ethical and environmental issues. It is becoming a reality.”
That reality was underscored by a recent report from the World Maritime Forum that said that the next generation of shipping execs was concerned primarily by socioeconomic and geopolitical issues. Diversity, ethics, environment and CSR were high among the topics in the organisation's annual essay competition, a clear sign that those issues will move up the agenda as that demographic move into leadership positions.
While that sounds like a death knell for the old guard, it makes thorny issues like passing the cost of sustainability onto clients a little less taboo. Mikael Karlsson says that it is an issue that is not spoken about enough, despite the fact that sustainability does not come for free. Francois, unsurprisingly, has addressed the issues with its clients – so far in a very positive manner.
Together with Peter Boras, Global Head of Francois, they have engaged with key stakeholders on their sustainability aspirations and the sustainable actions Francois is delivering to itself and its customers.
“We are talking to more and more clients about it,” Karlsson says. “We tell them that we are more ready than anybody else to meet the future with what we are doing.”
It is a true marker of a company's commitment to its ethos when one of its priorities is to engage and cooperate with companies that share its values. Everyone knows that in the hyper-competitive maritime supply chain, the easiest route to take would be to work with everyone that represented a pay cheque, irrespective of the reputation – but even that is changing.
In the corner of the market that until very recently has been solely concerned with price, Francois’ outlook is now more focussed on building partnerships with organisations that understand the value of its approach. It means they have had to remain steadfast, and more importantly transparent, on the fact they share some of the cost of sustainability.
“For the first time in my career, we have said no to some businesses, that wanted to work with us because they were only about price, and they did not share our values. Long term partnerships have to be more than price alone, albeit an important aspect.”
Karlsson says that the strategy takes into account the commercial needs of the business as well as the aim of improving long-term sustainability. Short-term cash gains are not always the name of the game.
The approach has informed other areas of the supply chain too. Francois sources many of its products locally, avoiding the costly and unnecessary transit costs of moving goods from one side of the world to the other where it does not have to. That local approach is critical because it gives the supply chain robustness and flexibility that others perhaps do not possess.
On a grander scale, it typifies the growing attitude in the shipping industry and its supply chain, that a responsible approach to all aspects of business is essential. Businesses must address environmental issues, support smaller business and embrace cultural change if the world is to evolve for the better. For organisations like Francois, who have those values woven into their fabric; aiming for a sustainable world is not a pipe dream – it is a reality. For Mikael Karlsson, it is all in a day’s work.
“We can each play our role, whatever the size. I am proud to be part of a company that has such a clear mission, and to be playing my part in that.”
This article was originally published in the Marine Trader, IMPA’s official journal for maritime procurement and supply chain management, in issue 07 of 2019. Head over to www.impa.net to find out more or simply read new issues on the go with the MT Journal app.