In today’s world, it is becoming increasingly difficult to ignore the need for sustainability. We are facing a number of global challenges, which are rightly giving rise to impact entrepreneurship – the future of the business world.
Companies are no longer simply economic entities: now, they also have a responsibility towards society and the environment. Therefore, it is important that every company is aware of the impact of its business activities, and that it also works to increase its positive impacts, or at least reduce and neutralise its negative impacts. Impact entrepreneurship is a growing trend where companies are increasingly focusing on driving business impact in the desired direction, alongside earning a profit.
These are companies that apply the principles of impact entrepreneurship, not only to create more sustainable business models, but also to better meet the demands of clients, investors, and regulatory bodies. Impact entrepreneurship is not just a trend, it is the future of the business world, where every company understands its impact and seeks to channel its positive results for the benefit of society and the environment.
LHV’s role in promoting sustainability
LHV Pank strongly supports sustainability and responsibility. We have embedded the ESG (Environmental, Social, Governance) principles into our business model and set an example for others. It is important to us that our business activities reflect our values and objectives, which include environmental protection, social responsibility, and good governance.
We have taken ESG principles to heart, as it is clear that the financial sector has an important role to play in achieving sustainable development, and we have responded to this challenge with the following steps:
- Environmental sustainability: we continuously monitor and reduce the environmental impact of our offices, and as a result, our office activities have been climate-neutral since 2022. We invest in sustainable energy production and renewable energy projects, and also encourage our clients to make more sustainable choices through green financing products.
- Social responsibility: we support a range of social initiatives and organisations that promote education, youth sports development, and other social objectives. We are committed to improving diversity and inclusion both within our organisation and in society at large.
- Good governance: we are committed to the principles of good governance, including transparency, integrity, and responsible management which, in turn, have helped us to build a reputation for integrity in the financial sector.
Promoting impact entrepreneurship in cooperation with Tehnopol Startup Incubator
Companies can no longer exist solely in the name of profit, making their business idea a reality by any means necessary. In 2023, we decided to go one step further and joined hands with the Tehnopol Science and Business Park to boost next-generation impact companies. We are sharing our knowledge and experience with entrepreneurs who want to make a positive impact on society and the environment. To this end, we created a 6-month accelerator programme for impact companies in cooperation with the Tehnopol Startup Incubator, which took on 10 companies.
Why is this cooperation important to us? Because we believe that our experience and expertise in ESG can be an inspiration to others. The mentors are our own people who have extensive experience in addressing ESG challenges and issues. Mentors help start-ups understand how to integrate ESG principles into their business model, how to measure their impact, and how to create sustainable business models in general.
The accelerator programme ended with a demo day for impact companies at LHV, where start-ups gave their elevator pitches and then answered questions from a panel of experts. The panel decided to award 5,000 euros in prize money to KideoCall, which helps children from families who have moved abroad to find a native-speaking community and develop their language skills through video chat and play activities. Alongside the business idea, an even more important factor was the assessment and mapping of the impact of companies, and how the entrepreneur understands their impact in the first place.
Measuring impact: the will is there but there is a lack of knowledge
The cooperation illustrated how much room for improvement there really is in the field of impact entrepreneurship in Estonia. Many companies feel a deep desire to contribute to creating a positive impact on society and the environment. They understand that their actions have wider consequences than simply earning a profit and achieving economic success. However, many of these companies face a challenge: how to measure their impact and assess whether they are even moving in the right direction.
Our cooperation with the Tehnopol Startup Incubator has shown that all companies, regardless of their sector, can contribute to a positive impact if they understand how ESG principles can be a natural part of doing business. Our longer-term goal is that there should be no need for a separate category of ‘impact entrepreneurship’ at all, because every company, regardless of size, is already engaged in mapping, measuring and managing its impacts. It must be as natural a part of entrepreneurship as basic financial management or communication with one’s clients.
At LHV, we believe it is crucial to provide our business clients with access to services that allow them to make more sustainable choices.
In conclusion, it can be said that impact entrepreneurship will be even more important in the future as it corresponds to the expectations of a demanding society, the demands of investors, regulatory trends, and offers companies the opportunity to be more innovative and competitive. Companies that take responsibility for their impact gain clear advantages, including a better reputation, competitive advantage, and a more sustainable business model. Being aware of one’s impact and measuring it is a step in the right direction for creating a better future for businesses and society as a whole.