HomeSOFTWAREEnvironmental Awareness Attracts Tech Investors And Customers

Environmental Awareness Attracts Tech Investors And Customers

The Sustainability for Tech report, published by Impact House in partnership with Reddit, tech2 impact and the Greentech Alliance, shows an apparent trend towards more investment in sustainable companies. Almost a third of the investors surveyed stated that they intend to make most of their total assets in sustainable companies in the future. Twenty percent want to make at least half of their future investments more sustainable. Sixty-eight percent agree that sustainability as part of a corporate strategy increases a company’s attractiveness for investments. In addition, Environmental Social Governance (ESG) and Sustainable Development Goals (SDG) criteria can help investors distinguish sustainable companies from others.

 In addition to sustainability, a start-up’s value proposition, scalability and founding team are other critical factors outside financiers consider when making investments, according to the survey results. Seventy-four percent of those surveyed named “personal preferences” as the main reason for investing in sustainable companies. In addition to sustainability, higher returns (36%) and lower investment risk (25%) are significant, but also the easier raising of funds (16%) or better opportunities for access to public funds (15%). The Sustainability for Tech report also includes insights into the most common processes for measuring and tracking sustainability and the top challenges facing the investment community.

The conclusions drawn from the report are based on a survey of over 200 European tech investors. Most of these are active in VC funds or accelerators throughout Europe – Central Europe is the most substantial market with 15 percent, followed by Eastern Europe (12 percent), the Baltic (16 percent) and northern (20 percent) markets. Impact House, a sustainability consultancy for fast-growing tech companies, published the Sustainability for Tech report. The survey was produced in collaboration with the Green Tech Alliance, an alliance to support the Greentech community, Pundit, software for portfolio management and tech2impact.com, a global digital hub for impact tech.

Users Will Prefer “Green Clouds”

However, sustainable companies are not only of interest to investors. Customers also want to take a closer look in the future regarding purchasing decisions. The analyst firm Gartner predicts that the carbon emissions of hyper scalers will influence purchasing decisions for cloud solutions by 2025. As environmental, social and governance (ESG) priorities and corporate reporting gain increasing attention, more than 90 percent of companies have increased their investment in sustainability programs since the pandemic began compared to 2017. They will observe suppliers and partners and reach their position regarding environmental and climate protection. According to Gartner, the top 10 cloud providers (by revenue) account for 70 percent of all IT spending on cloud infrastructure, platforms and applications.

As such, cloud sustainability initiatives will also start with the leading cloud providers, who are among the world’s largest data center operators and are critical to reducing IT-related carbon emissions. “Although virtually all cloud providers have sustainability initiatives in place, their progress toward achieving carbon reduction goals and net-zero emissions strategies varies widely,” said Ed Anderson, Distinguished Research Vice President at Gartner. At the moment, however, sustainability metrics and workload placement tools are immature and not always transparent, making it difficult for organizations to fully and accurately assess the true sustainability impact of their cloud usage.

However, the hyperscalers would invest “aggressively” in the sustainable operation and delivery of cloud services to achieve net-zero emissions within the next decade or even earlier. Anderson, therefore, expects “an increasing availability of tools that help companies calculate and reduce their carbon emissions through the effective use of cloud services, as well as tools that help optimize cloud spending today.” Stakeholders will increasingly prompt them to make their sustainability information public.

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