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Case Study

The Wärtsilä Way: Green is not black or white

By Julia Katharina Binder and Valerie Keller-Birrer

15 pages

October 2023

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Reference: IMD-7-2483

This case highlights Wärtsilä’s significant role in the decarbonization journey of the energy and marine sectors. Despite the difficult financial situation and challenging market dynamics – Wärtsilä was active in industries that relied heavily on fossil fuels with little potential for future growth – CEO Hakan Agnevall took a bold decision to convert threats into opportunities and use decarbonization as a vehicle to transform the company. His vision was to turn the company into a leader in sustainable solutions. The ambitious goal set by Agnevall presented Wärtsilä with numerous challenges. The industries in which the company operated were undergoing disruptive changes, but the transition to sustainable alternatives would take decades. Both the energy and maritime industries were characterized by long-term investment cycles and a certain conservatism in terms of adopting new technologies. One of the major hurdles faced by Agnevall was timing. Wärtsilä already had a portfolio of green technologies ready to be offered to customers, but the market demand for these solutions was not yet fully established. The transition to green solutions would require time. As the industry gradually transformed, Wärtsilä understood that it would take several years before the company could fully benefit from its new strategy and investments in green technologies. Balancing the long-term strategic commitment to decarbonization with the need to address short-term financial imperatives and satisfy shareholders was a critical challenge. Wärtsilä was making long-term investments in various green technologies, but the uncertainty surrounding which technology would eventually prevail added to the complexity of the situation.

Learning Objective

Understand the challenges of decarbonization journeys in the industry sector.
Learn to use the Three Horizons framework to address sustainability dilemmas that span short-term improvements, medium-term transitions, and long-term transformations.
Explore the central role of purpose within transformational journeys to grasp how it can drive meaningful change.
Study a real-world instance of a shift to service-oriented models to enhance resource efficiency, reduce waste, and foster sustainable consumption.

Keywords

Sustainability, Business to Business, Disruption, Strategy, Decarbonization, Renewable Energy, Transformation, Stakeholder Management, Communication, Ecosystem, Servitization, Affordable Energy, Clean Energy, Climate Action, Goal Partnerships

Settings

World/global, Finland
Wärtsilä, Energy, Logistics and Supply Chain, Shipping
2021-2023

Type

Field Research

Available Languages

English

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Teaching note

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