From Results to Action: Vinnova’s Journey Towards a Sustainable Future - Part 1 / 3: Impact Data Intelligence
In a rapidly evolving business landscape, where societal and environmental concerns are at the forefront, it's become more apparent than ever that companies need to do more than just make profits. They need to make a positive impact on the world. As a trailblazing funder of early-stage startups, Vinnova, Sweden’s Innovation Agency, supports companies that are contributing to solving major global societal challenges through their products and services, from water security to renewable energy.
Beyond providing start-ups with critical funding to propel their growth, Vinnova is committed to building a supportive start-up ecosystem. To support the start-ups it funds, Vinnova provides numerous technical assistance opportunities, including access to comprehensive ESG+Impact data intelligence through Proof. This support helps ensure that the companies and projects Vinnova funds are financially viable in addition to contributing to measurable positive sustainability impacts.
Since 2021, Vinnova has partnered with Proof to provide its Innovative Startups cohorts with access to sustainability data intelligence through Proof. After two years and two cohorts, we’re excited to share our insights into how to support the sustainability start-up ecosystem through data intelligence.
The Problem
In the business-as-usual approach to impact measurement, investors and agencies fall victim to two major pitfalls that stifle the ability to translate metric results into impact outcomes:
Pitfall #1 - Getting caught up in the metric selection process
- Investors tend to over-analyze whether the chosen metrics are the “right” ones, rather than getting started and rapidly iterating. Many investors focus on setting metrics that are unique to each portfolio company, rather than defining a portfolio-wide starting point to build from
- When it comes to data availability, investors often assume that their companies will not have data on the chosen metrics. For examples, with metrics like Greenhouse Gas (GHG) Emissions, companies may not already report on their Scope 1, 2 and 3 emissions; however, when prompted with more basic questions like electricity purchased or airline miles traveled, companies can indeed report on the dimensions required to estimate GHG emissions
- In an effort to be comprehensive, investors tend to choose too many metrics (20+), making the process overwhelming for companies. When impact measurement is overly burdensome, it becomes taxing for the company to report and drains critical resources
Pitfall #2 - Focusing on data collection and metric performance, rather than meaningful improvement
- Investors often send a data collection spreadsheet requesting that companies manually report on their performance, rather than a digital approach that offers reciprocal benefits for companies
- Investors tend to focus on whether a metric performance is “good” or “bad,” rather than trying to understand what the result means for the company based on its unique history and goals for the future
- Requests for sustainability data reporting often lack the context required for companies to understand how the data will empower their business and impact decisions
The Solution
Avoiding these common pitfalls requires getting back to the first principles of impact measurement. For an investor or a company, the most basic purpose of ESG+Impact measurement is to:
1. Evaluate business risks to understand the financial, regulatory, legal, climate, and geopolitical factors that may impact the organization’s future success
2. Gain meaningful insights regarding opportunities to enhance the organization’s product or service delivery and mitigate its impact on the environment and society
3. Act on those insights to achieve the company’s business and impact goals, including increasing sales, raising investment capital, and expanding to new markets
Through the lens of risks, insights, and opportunities, Proof flips ESG+Impact measurement on its head - placing actionable business insights at the center.
In the next two articles in this series, we will share seven proven lessons from Vinnova and Proof’s partnership to unlock transformative insights from sustainability data:
Lesson #1 - Metrics Matter… But They’re Not the Be-All End-All
Lesson #2 - Rapidly Translate Metric Results to Action
Lesson #3 - Engage Stakeholders for a Holistic Perspective
Lesson #4 - Leverage the Power of Community
Lesson #5 - Proactively Navigate Regulatory Compliance
Lesson #6 - Embrace Innovation and Growth
Lesson #7 - Tie Financing to Impact Outcomes
About Vinnova: Vinnova helps to build Sweden’s innovation capacity, contributing to sustainable growth. Vinnova makes it possible for organizations to address challenges together by enabling innovation that makes a difference. Interested to see if Vinnova’s funding might be a good fit for you? Learn more about Vinnova’s funding opportunities here.
About Proof: Proof provides access to the world’s largest consolidated set of reliable, material and high-quality ESG & impact data for private markets. Proof's driving vision is to serve as the largest force multiplier for creating positive, meaningful change through business. Interested in learning more? Sign up for a platform demo here!
