COMPANY PERSPECTIVE: The Swedish company Essity, with brands like Libero, Libresse, and Tork, is one of 100 companies participating in the EU’s so-called AI Pact. Top executive Carl-Magnus Månsson shares his best tips for applying AI to the core business. “We see huge opportunities to accelerate,” he says.
AI development has truly taken off, and more and more companies have started implementing the technology in their operations. To address this development and ensure that the use of AI systems is regulated based on potential risk levels, the EU has introduced legislation that came into force on August 1, 2024.
In addition, the European Commission has launched an initiative known as the AI Pact for Responsible AI. One of the 114 companies approved by the European Commission and Pact for Responsible AI is the Swedish company Essity, a global hygiene and health company headquartered in Stockholm. The company has 36,000 employees and has brands like Libero, Libresse, Tena, and Tork.
– Digital technology has been part of our daily lives for quite some time, and we’ve been actively working to use digital capabilities in ways closely aligned with the values we want to create. We treat AI as an extension of the digital capabilities we’ve built over many years. With AI, we can, for instance, conduct even better analyses, become more efficient, and create an even better customer and consumer experience, says Carl-Magnus Månsson, Chief Digital & Information Officer at Essity.
For AI to function in practice, it’s important to embed AI into traditional business and operational development, he says.
– At the same time, we understand, of course, that it’s a technology that doesn’t come without risks, and perhaps risks of a different nature than previous technologies.
– From this perspective, we have also been closely monitoring developments in legislation and regulatory issues. That’s why we’ve implemented a model to understand and manage the choices we make.
He explains that the company wants to be early in understanding the legislation, and it was an obvious choice to apply to join the AI Pact.
– It doesn’t sound so good in Swedish, ‘AI pact’ – since we usually associate pacts with the TV show Survivor. But it’s really a voluntary association aimed at increasing understanding of the legislation’s intentions and sharing experiences on how to work effectively with regulatory compliance and follow-up.
The AI Pact is a framework designed to facilitate compliance with the EU AI regulation. The EU’s voluntary commitments under the AI Pact encourage participating companies to commit to at least three core actions.
These actions include adopting an AI governance strategy to promote the adoption of AI in the organization and working towards future compliance with the AI law, identifying AI systems likely to be classified as high-risk under the AI law, and promoting AI awareness and literacy among staff to ensure ethical and responsible AI development.
– When the opportunity to join arose, it was an easy decision for us. We see it as a good investment to continue developing Essity and perhaps even influence the world around us.
– We believe that if you’re not on this journey early and don’t understand the risks and opportunities, it will be very difficult when it comes to applying AI in reality later.
He explains that the company already works with AI in different ways. For instance, the company uses AI to generate digital images, allowing a specific image to be adapted to a certain environment or language without needing to take new photos.
– We also use AI-based support tools to train our factory operators, helping them quickly become more secure and make the right decisions. This leads to both increased efficiency and enhanced safety.
– Additionally, we optimize logistics flows using AI.
The goal, he says, is to raise the entire organization’s competence in AI.
– I don’t think you should be afraid that AI will take your job, but you might wonder if someone who can use AI better than yourself could be more relevant in doing your job. That’s why we want to educate the entire Essity team, as we believe there are huge opportunities for all of us to accelerate our own capabilities.
Carl-Magnus Månsson describes himself as a classic tech optimist and believes that the rise of AI technology can be compared to electricity.
– When it comes to all new technologies, there’s the first wave of fascination, then you might enter a phase of ‘okay, was it really as good as everyone said?’ Maybe we’ve moved past the fascination phase now and are a bit more cautious.
– If you think about electricity, it doesn’t have much inherent value. But the next step, when you create an electric motor that converts electricity into mechanical movement, is where the huge gains happen. And that’s exactly what will happen with AI too.
But there are risks with AI. One example that is often mentioned is large-scale facial recognition or profiling, which can be problematic from a privacy perspective.
– Another example closer to us is automating recruitment selection processes, where there’s a risk that the model has been trained on a certain data set and has developed a biased view.
To avoid problematic uses of AI, the company has developed its own ethical policies for how they will work with AI.
– This means we are clear about what applies, and when issues arise since we have a policy on how to act.
He explains that it’s important to step in early in the process and ensure that different regulations don’t conflict with each other.
– Each industry often has specific regulations, and these regulations are often more general, which can create interpretive challenges in some cases. It’s very important for us to be involved early, both as Essity and through the organizations we belong to, to influence legislation—and not least the interpretation of legislation.
One of the major challenges for European companies in the future is the increasing regulatory burden. But Carl-Magnus Månsson does not share the view that the new AI regulation will be problematic for Essity’s global competitiveness.
– You have to remember that we already operate in highly regulated environments and are used to implementing new legislation effectively.
– I can only say that we don’t think the regulations as they are currently formulated will limit us. We are confident that we can create the values we need within the regulations. From a broader perspective, one must of course consider the complex question of whether our European approach to regulations limits competitiveness and innovation compared to other regions.