a literature review
Demanding global challenges derived from the exploitation of natural resources call for adjustments in our current economic system. So far businesses have emphasized the economic dimension i.e., profits to shareholders, while the other two sustainability dimensions, ecological and social, have been peripheral. Hence, it seems companies’ efforts to sustainable development seem not to suffice. Circular bioeconomy aims at balancing the sustainability dimensions through the usage of renewable resources efficiently. Recently it has gained strong support within European policy level initiatives (e.g., European Commission, 2018) and national strategies (Finnish Government 2022). In the forest-based sector (FBS) these initiatives have been applied by producing bioenergy and bioproducts (Näyhä et al., 2014) that substitute fossil-based resources while providing economic benefits such as increased competitiveness to companies (Korhonen et al., 2018).
Companies have an important role in the sustainability transition (Loorbach & Wijsman, 2013) due to their ability to enhance sustainable business practices, innovation and value creation (e.g., Bocken et al., 2014; Boons & Lüdeke-Freund, 2013). Simultaneously, responding to the environmental and societal challenges requires collaborative efforts from several actors and value co-creation (Möller et al., 2020). Despite having several definitions, sustainable value creation can be described as companies' efforts to increase environmental and social well-being by doing business (Evans et al., 2017; Hart & Milstein, 2003; Dyllick & Muff, 2016), while acknowledging a broad network of stakeholders i.e., beneficiaries of the value creation (Upward & Jones 2016). This has been further referred to regenerative business (Elkington, 2020; Hahn & Tampe, 2021). Sustainable value creation can be conceptualized through business models (e.g., Lüdeke-Freund et al. 2020).
To respond to the needs of the operating environment, FBS companies have started to apply more sustainable forest management and production methods while communicating sustainability issues. Despite describing themselves as forerunners of circular bioeconomy (Näyhä, 2019), the sustainability of the FBS has been debated in science (Kröger & Raitio, 2017; Gawel et al., 2019) and public discussions. Furthermore, FBS has been considered as path-dependent and locked-in to certain technologies (Luhas et al., 2019). However, value creation is a prerequisite to increase the sector’s long-term competitiveness and accelerate its renewal in the globalized business environment (Lähtinen & Häyrinen, 2022). The sector could fail in adopting novel sustainable, networked value creation logics while preventing it from adjusting to the sustainability transition (Toppinen et al., 2017). Hence, it is necessary to gain a more comprehensive understanding on sustainable value creation to support the sector in the sustainability transition.
There is a growing interest in both assessing and developing FBS’s sustainability. Companies use various monitoring tools and reporting for sustainability such as GRI and EMAS as well as standards and certification schemes such as FSC and PEFC. However, there remains ambiguity regarding e.g., the certifications’ effects to environmental and social sustainability (e.g., van der Ven & Cashore, 2018) and sustainability reporting lacks reporting of progress towards specified plans and targets (Toppinen & Korhonen-Kurki, 2013) as well as a value network perspective (Mäkelä, 2017). Thus, it seems these tools are often considered as a burden and not necessarily as an opportunity to businesses. In research, especially the ecological sustainability of FBS has been studied while focusing on the effects of intensified forest use on e.g., biomass sufficiency, biodiversity and carbon sequestration (e.g., Kumar et al., 2021; Eyvindson et al., 2018). Moreover, many of these sustainability-oriented studies tend not to provide information on how companies could move forward and benefit from the sustainability assessments and requirements, and thus be supported in the sustainability transition. Hence, another field of research related to FBS’s sustainability has focused on business sustainability through the perspectives of corporate responsibility (e.g., Mikkilä & Toppinen, 2008; Toppinen & Korhonen-Kurki, 2013), supply chains (e.g., Santos et al., 2019; Karvonen et al., 2017) and societal transitions (e.g., Näyhä, 2019). However, there are only a few studies considering the social aspects and holistic sustainability of FBS (Mustalahti, 2018; Gawel et al., 2019; Ranacher et al., 2020). Studies considering sustainable innovation, business models and value creation are emerging (D’Amato et al., 2020; Hansen, 2016) and are necessary for the sector’s development and long-term competitiveness. However, sustainable value creation needs to be measured and monitored within FBS to avoid creating negative trade-offs and diminishing societal and environmental values. Due to the various conceptualizations of value creation, it is beneficial to gain qualitative understanding on the concept and its’ foundations within FBS related research. Hence, the aim of this systematic literature review is to provide a profound synthesis on how sustainable value creation is considered in the diverse literature regarding FBS and how related research and business management could be developed in the future.
The data for the review was collected and identified using FBS and value creation (incl. business model) related search terms. After screening 396 scientific papers through two databases Scopus and Web of Science, 79 papers were selected based on selection criteria. Thus, only English peer-reviewed articles, conference papers or book chapter were included. Due to the systemic nature of sustainability challenges and to gain a broad understanding on sustainable value creation, studies from e.g., social, business and environmental sciences were included. Papers not relating to the search terms were excluded. The data was categorized based on the year of publication, research field, methods and theories applied, qualitative/quantitative nature of the study, and perspective on value creation - whether it entails economic, environmental and/or social domains.
Based on the results, the perspective of sustainable value creation and especially the environmental and social dimensions have emerged in the FBS literature within the last 10 years. Most of the studies consider and measure value creation from economic foundation and through physical products. Value creation is also seen as an intangible benefit e.g., through services, digitalization and customer relationships. Value creation regarding environmental and social dimensions is considered more on conceptual level. Most of the studies are qualitative and mixed methods studies are lacking. Business model perspective on value creation has appeared in the studies gradually while other theoretical approaches e.g., service dominant logic, stakeholder theory, dynamic capability view and corporate social responsibility have been presented too. We can conclude that sustainable value creation could be necessary for the FBS’s transformation as well as to other natural resource-based industries, and hence a systemic perspective on value creation, especially from the foundations of environmental and social well-being, should be emphasized both in future studies and business management. Since many of the studies discussed in this literature review are on conceptual level, more research is needed for empirical understanding on sustainable value creation. Furthermore, there is a need for inter-disciplinary approach in studying and assessing sustainable value creation within FBS and several different theories, methods and tools could be combined.
We contribute to the NBM Conference in 2023 by increasing knowledge on sustainable business models and value creation within a FBS – sector that holds promising solutions to several global challenges but simultaneously can have negative effects to environmental and social systems. This review connects to the organizational impact level and conference track 3.4 by describing the current state of how FBS research accounts for several sustainability performance concepts and methods related to value creation, and hence could be developed to support the foundations of regenerative business.
Sustainable value creation, business model, forest-based sector, circular bioeconomy, sustainability transition, literature review
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Boons, F., & Lüdeke-Freund, F. (2013) Business models for sustainable innovation: state-of-the-art and steps towards a research agenda. Journal of Cleaner production. 45, 9-19.
D'Amato, D., Veijonaho, S., & Toppinen, A. (2020) Towards sustainability? forest-based circular bioeconomy business models in finnish SMEs. Forest Policy and Economics. 110, 101848.
Dyllick, T., & Muff, K. (2016) Clarifying the meaning of sustainable business: Introducing a typology from business-as-usual to true business sustainability. Organization & Environment. 29(2), 156–174.
Elkington, J. (2020) Green swans: the coming boom in regenerative capitalism. Greenleaf Book Group.
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Eyvindson, K., Repo, A., & Mönkkönen, M. (2018) Mitigating forest biodiversity and ecosystem service losses in the era of bio-based economy. Forest Policy and Economics. 92, 119-127.
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Hahn, T., & Tampe, M. (2021) Strategies for regenerative business. Strategic Organization. 19(3), 456-477.
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Kumar, A., Adamopoulos, S., Jones, D., & Amiandamhen, S. O. (2021) Forest biomass availability and utilization potential in Sweden: A review. Waste and Biomass Valorization. 12(1), 65–80.
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Mikkilä, M., & Toppinen, A. (2008) Corporate responsibility reporting by large pulp and paper companies. Forest policy and economics. 10(7-8), 500-506.
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Ranacher, L., Wallin, I., Valsta, L., & Kleinschmit, D. (2020) Social dimensions of a forest-based bioeconomy: A summary and synthesis. Ambio. 49(12), 1851-1859.
Santos, A., Carvalho, A., Barbosa-Póvoa, A. P., Marques, A., & Amorim, P. (2019) Assessment and optimization of sustainable forest wood supply chains–A systematic literature review. Forest Policy and Economics. 105, 112–135.
Toppinen, A., & Korhonen‐Kurki, K. (2013) Global Reporting Initiative and social impact in managing corporate responsibility: a case study of three multinationals in the forest industry. Business ethics: A European review. 22(2), 202–217.
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