February 21, 2020No Comments

What characterizes successful companies in 2025

Top 5 risks for the global economy are all related to the environment

The World Economic Forum annual meeting was held in Davos In January 2020. In their report of the most likely risks that will affect the global economy, all of the top 5 risks are related to the climate and environment:

  1. increased occurrences of extreme weather
  2. the after effects that will follow if we fail to act on the climate changes
  3. natural disasters
  4. loosing biodiversity and ecosystems
  5. environmental disasters caused by human

We wanted to know better how companies should act in this wave of sustainability change needed. And what characterizes a successful company in the year 2025 (5 years from now and 5 years left to reach the goals of agenda 2030)

4 trends that affect companies with regards to sustainability

In Sweden we have identified 4 trends that affects companies with regards to sustainability and pushes an increased focus on it regardless what company or industry.

International & institutional capital flows towards sustainable investments

The biggest owners on the Swedish stock market are putting their weight behind sustainable investments.

One example is BlackRock that emailed all the CEO's that climate risks are investment risks

Another example is Swedbank Robur who issued a new policy in november for sustainable investments

Regulatory expansion within multiple areas

EU taxonomi is to be implemented in 2021. And of course we have Agenda 2030.

In Sweden we recently received an updated version of the Swedish Code of Corporate Governance that includes stricter regulations around sustainability reporting.

Customer behavior changes with increased awareness

The Greta-effect. And it is not just B2C. For B2B consumption there are now more demands on suppliers.

Even though the end consumer is aware, they are not consistent in the purchasing behavior. This indicates that we are in the early phases of this trend.

Transparency is required for all stakeholders

Both B2C and B2B consumers want to know that the product and services they buy are sustainable.

Employees and partners want to know how the companies act.

Broad study of 40 of the largest and most well known Swedish companies

These trends definitely have a big impact on companies. With this in mind we wanted to understand better how far companies have gotten and what they think of the future.

We interviewed 40 of Sweden’s largest and most well known companies across multiple industries. The interviews were conducted with Owners, Board members, CEOs & Sustainability directors.

  • finance
  • insurance
  • construction
  • energy
  • real estate
  • infrastructure
  • forest industry
  • car industry
  • manufacturing industry

The interviewed individuals and companies are kept anonymous to get as honest picture as possible.

The result of the study lead to 6 main observations that both brings up the current situation and what they think is critical in the future to still be a successful company in the year 2025.

Want to have a successful company in 2025? Then these are the 6 areas to work with

You best-before-date

It's about profit

Smooth choice

Keep it real

Bye bye silo

Measure and score


We are in the midst of a huge shift. You need to be prepared for when the wave hits in your industry so you are able to ride on the wave of change happening.

Your company need to go from business as usual to a constant "business as unusual"

Do you know when you get hit by a tipping point?

How long will you be relevant for customers, employees and investors?

For how long will you be able to continue with your current business model?

We have a ton more interesting material that we would like to share and help your company transition and become a successful company in 2025! Contact me if you want to meet and discuss more.


January 14, 2020No Comments

Impact investment and responsible investment – what is it all about and when does it make sense?

Digitalisation has largely changed the conditions for doing business.

Some talk of a fourth industrial revolution that will redefine not only business but also how we live, work and relate to one another. It can easily be argued that a parallel, yet highly related trend, is the aspirations to build a more sustainable society, through more responsible business. And perhaps even more than that, business that not only settles with avoiding being part of the problem - but attempts to be part of the solution. It is within that context we should look at impact investments.


Is there a business in making a difference?

When we decided to half the size of our bags of maize seeds, we reached a new category of customers – smallholder farmers. You may call it impact investment, I call it business.

- CEO of seed company, Southern Africa

Those were the words of a CEO of a seed company in Southern Africa, that I spoke to a few years ago. You’ll find plenty of similar examples from emerging markets around the globe. It may be about doing good but the main driver is rather that poor people are also customers and if you sell enough you make a good profit.

This is crucial for the telecom industry in for example Africa and increasingly so also for the energy market where small solar panels are sold or leased out at an impressive pace. So, does investing in a mini-grid in Zambia or a wind-farm in Sweden make you an impact investor? Not necessarily.

There are plenty of definitions trying to grasp the meaning of impact investment.

Generally they refer to financial investments that generate a return in both financial and other dimensions. Those other dimensions can often be characterised as either Environmental, Social or Governance (ESG) related. Often impact investment is characterised by:

  1. An expectation of a financial return on investment (though it doesn’t always have to be at pair with market rate) as well as
  2. An expectation of the investment having a positive impact on society and/or the environment. Sometimes an ambition to measure the impact is added as a third characteristic.

Investing in a wind-farm becomes an impact assessment only – it can be argued - if the investor is prepared to accept a trade-off between ESG-impact and financial return. If an investment is done only on financial grounds and regardless of its impact on environment or society, it’s consequently not an impact investment. Which does not exclude, as the quote from the CEO of the seed company above illustrates, that it can have a hugely positive impact on planet and society.

Responsible investments can be said to differ from impact investment...

...in that the former focuses on reducing the negative impact of an investment, while the latter goes a step further by explicitly wanting to have a positive impact. Responsible investments are often about excluding e.g. weapon production, fossil fuels etc. (often called “value-based exclusion”). It may be assumed that most impact investments are also responsible investments, though in theory it doesn’t have to be that way.

When a responsible investment becomes enshrined in the business strategy of a company regardless of financial implications it may no longer make that much sense to distinguish it from impact investments. Some companies argue that

Is there a business in making a difference?

Whether we are obliged to by law or not, we see it as a necessity, or a hygiene factor if you wish, to behave responsible; to pay our labour a reasonable salary, to avoid virgin materials and so forth.

- CEO of medium sized Swedish company, interviewed during a market research study

Even though use of non-renewable resources would have increased profit, the company choose another route. A route they consider as a long-term sustainable route.

Is there a price premium associated with sustainability?

There are also plenty of companies and investors choosing an ESG route because they believe there is a price premium in sustainability. The issue of price premium is a little complicated though:

Academic and industry research strongly suggest, notwithstanding a selection of non-negative and contradictory results, that incorporating ESG metrics may increase risk-adjusted returns. Our results, however, would indicate that any benefit from incorporating ESG credentials into a portfolio is already captured by other well defined and known equity factors. An ESG-tilted process does not deliver higher risk-adjusted returns, since, once we remove the market cap and volatility bias, ESG as an equity factor has returns compatible with noise (t-statistics of less than 1)

- Breedt et al, The Journal of Investing

As the quote above illustrates ESG is, despite all the talk and a fair amount of research, still not considered a traditional factor in investments. This may be because there still isn’t any solid evidence that high ESG scoring in investment portfolios results in higher stock value. It doesn’t behave like other traditional factors such as value, size, volatility and quality.

There may be several reasons for the lack of strong correlation between sustainability and value but it should not automatically be assumed that ESG – or sustainable business – does not, under certain circumstances, yield higher returns and a higher stock value.  Looking at some of the research generated using the Sustainability Accountant Standard Board´s, (SASB) materiality index reveals some fairly solid evidence that ESG actually can generate material value. But: you need to know what to look for.

Some questions you should ask if you are interested in impact investment

So, if you are an investor wanting to apply an ESG approach, wanting to have a decent financial return on investment as well as an impact beyond profit the following set of questions may be a good start:

  1. What factors or parameters to look for in order to ensure a return and what kind of return are you expecting? This question is dependent on what time perspective you have, which - needless to say - also impacts risk and volatility.
  2. What kind of impact are you interested in? And how do you ensure you get “good value for money”, i.e. that your investment is efficient enough regarding the impact that you are expecting?
  3. How do you expect to measure your impact beyond financial profit?

Many investors are prepared to lower their expectations on their return slightly, if they also know that their investments have an impact on for example the sustainable development goals. This may partly be out of solidarity, but it sometimes also stems from a belief that impact investments also contributes to the betterment of the world, including the stock market. An expectation that their investment may actually be rational in the long run. This is only true, however, as long as the investment also gives a financial return.

Very few people are prepared to lose money on their investments; then it is charity, not sustainability.

This article is written by David Wiking

If you want to know more about impact investment and surrounding areas, please feel free to contact David at:

david.wiking@cartina.se or +46 73 442 74 72

Profile photo for david.wiking

 If you want to know more about Cartina and get in touch with our sustainability experts, do not hesitate to contact us. Reach out through the button below and we can initiate a conversation.

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Cartina has since 2013 helped both multinationals and startups translate digital opportunities into lasting and profitable business. We have since the start mainly worked with management services but are now expanding our offering with tech & design.

With a desire to develop oneself, clients and colleagues, our team of several senior digital experts take pride in delivering sustainable solutions that matters for our clients and society. 
Cartina is founded and owned by the investment firm Acacia Asset Management AB together with partners in the firm.


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