The impact of environmental sustainability on venture capital, private equity, and investor relations : Exploring Lapland, Finland as a space for sustainable investment
Koltonuk, Daniel J. (2020)
Koltonuk, Daniel J.
2020
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2020111222737
https://urn.fi/URN:NBN:fi:amk-2020111222737
Tiivistelmä
Investors are increasingly considering environmental sustainability in their decision-making processes in light of risks such as climate change, growing consumer demand, and evidence that sustainable businesses perform just as well or better than their counterparts who do not prioritize sustainability initiatives. In the case of venture capital (VC) and private equity (PE), sustainability is an emerging consideration for asset owners and fund managers. Some applications of VC and PE, such as impact funds, have identified sustainability as a primary concern. Companies that adopt sustainable business models can potentially attract greater investor interest, and sustainability-minded fund managers can invest with greater confidence when their values are aligned with those of their portfolio companies.
The region of Lapland in Finland is an investment space that can benefit from VC and PE activity, particularly regarding those companies who struggle to access capital. Concern for the environment is paramount among local stakeholders in Lapland, and this stems from both an inherent respect for the natural landscape as well as those industries whose growth relies on its preservation. Further, as the brand of Lapland is closely linked with the environment, disregard for sustainability directly threatens the value of the brand. Sustainability-focused VC and PE firms are therefore already aligned with Lapland’s entrepreneurs in terms of values.
The investment climate in Lapland can be characterized by three dominant industries, great opportunity among currently less-visible industries, abundant local expertise, and a certain level of controversy regarding sustainability. Additionally, negative perceptions about Lapland persist among some investors. For Lapland’s investment future, enhanced investor communication and relationship development is required. This thesis highlights the opportunities and challenges with respect to investing in Lapland, provides recommendations for building strong investor-entrepreneur relationships, and suggests a hybrid impact fund and incubator model for ensuring sustainable development while increasing investor interest.
The region of Lapland in Finland is an investment space that can benefit from VC and PE activity, particularly regarding those companies who struggle to access capital. Concern for the environment is paramount among local stakeholders in Lapland, and this stems from both an inherent respect for the natural landscape as well as those industries whose growth relies on its preservation. Further, as the brand of Lapland is closely linked with the environment, disregard for sustainability directly threatens the value of the brand. Sustainability-focused VC and PE firms are therefore already aligned with Lapland’s entrepreneurs in terms of values.
The investment climate in Lapland can be characterized by three dominant industries, great opportunity among currently less-visible industries, abundant local expertise, and a certain level of controversy regarding sustainability. Additionally, negative perceptions about Lapland persist among some investors. For Lapland’s investment future, enhanced investor communication and relationship development is required. This thesis highlights the opportunities and challenges with respect to investing in Lapland, provides recommendations for building strong investor-entrepreneur relationships, and suggests a hybrid impact fund and incubator model for ensuring sustainable development while increasing investor interest.