The missing part of the climate conversation
Scalable tech companies are working on implementing sustainability in their business strategy, but how to create a strategy that helps attract an investment round? Impact House has decided to partner up with key organizations in the tech & impact ecosystem to find it out.
Photo: Jack Anstey, Unsplash
“Sustainability is on top of the agenda in fast-growing tech company HQs across Europe. I know, because I am virtually visiting them regularly,” shares Kristine Nagle, founder and sustainability advisor of Impact House.
The reasons why a fast-growing tech company would think of sustainability vary, but some of the most common ones are:
The latest legislation from European Commission (EU Taxonomy and proposal for a Corporate Sustainability Reporting Directive) is truly a wake-up call for many. Chances are, as soon as 2022, all companies above 500 employees will have to report on their ESG performance.
Customers are demanding information that company founders currently don't have. What is the product's carbon footprint? What natural resources are used in the production?
And we all individually are starting to experience extreme weather events that are impossible to ignore. We hear about PMs apologizing for wildfire catastrophes too late, the world’s glaciers melting at a faster pace than ever, floods in Germany, and us in the Baltics (Northern Europe!) enduring tropical heat.
These are important indicators for any company out there, but an especially important audience for any fast-growing tech company is staying rather quiet. Angel investors, VCs, accelerator funds, and family offices. Do investors look at sustainability as one of the key criteria for an investment decision? What is the most important to them?
“Our goal is to understand how sustainability is perceived by investors to then educate the ecosystem holistically,” adds Simon Thies, co-founder of Greentech Alliance.
We want to find a way to incorporate the right KPIs in the systems we already have to see many companies taking steps in the right direction.
“At Rundit we follow the reporting habits between startups and investors on a daily basis. Recently we’ve been delighted to see that sustainability is increasingly taken into consideration on both sides of the table. Besides financial KPIs, investors are now requesting their portfolio companies to also detail ESG/ SDG KPIs in their reporting. Financial KPIs alone are no longer satisfactory for investors when making an investment decision,” shares Viivi Halinen Customer Success Manager at Rundit.
Sustainability as part of the business strategy can be a massive advantage for any company, but both companies and investors struggle to define and measure it.
“With massive fires, floods, and extreme heatwaves all over Europe, we no longer can say that sustainability is not a priority in the agenda of every company today,” adds Sasha Lipman, Founder of tech2impact.
The unique insights from this survey should bring more clarity to the topic that is still confusing to many. And with more clarity, we can hope to really make the change happen.
If you found this article interesting, feel free to download the “Sustainability for Tech“ report here and get access to insights from 200+ European Tech Investors!
P.S. We are not claiming that we are the first ones to ask investor insights on sustainability. There is the State of European Tech report, but it includes data on SDG-focused companies. Also the GIIN's Annual Impact Investor Survey, but this one, too, covers only the impact investors (investors that focus on companies whose main business is to address Sustainable Development Goals).
The issue with this data is that impact startups and SDG-focused companies are a tiny part of the economy. We want to see many companies transform themselves and become sustainable. But for that, we will need an investor buy-in.
