From solar-powered micro kitchens to circadian rhythm sensors to help people with dementia. From wild foods to interior products made from recycled coffee sacks.

Do you think there is a contradiction between making money and doing good for the environment and people? Well, think again. "Doing good" and "doing well" are no longer opposites, and there is a huge development underway, where investors are increasingly focusing on both financial returns and positive impact on the world.

But what exactly is impact investing? How do you do it? And what impact entrepreneurs are out there?

Christian Arnstedt and Anne Skare Nielsen at Investor Days. Photos: Lenka Simkova

What is impact investing?

At its core, impact investing can be defined as: Targeted investment in companies with the aim of creating beneficial social or environmental effects while also generating a financial return.

Impact investing is therefore not a philanthropic project where money is donated to charitable causes, but rather an investment strategy that aims to create positive effects in society and provide the investor with a financial return.

Increasing focus on impact among investors

According to data from Danske Bank, investments in impact startups have grown by nearly 600% in the Nordics since 2016.

This trend became clear when Bæredygtig Herning hosted investor Christian Arnstedt (known from the DR program "Løvens Hule") for the first round of this fall’s Investor Days, where we focused on impact investing in collaboration with Den Sociale Kapitalfond.

Christian Arnstedt mentioned that there is a growing focus on sustainability among investors. More and more investors are placing high importance on social and/or environmental sustainability in their investments, and as a result, larger sums of money are being directed towards the development of companies that actively create strategies for their impact on the world.

One framework for understanding impact is the five 'impact dimensions' from Impact Frontiers, which you can see in the image here:

Look for those trying to do something difficult

Futurist Anne Skare Nielsen also gave a talk at the first session of Investor Days, and she advised the attending investors to look for those who are trying to do something difficult.

"Even if they haven’t reached their goal yet, you only get better at what you practice, and those who are practicing solving the hardest problems of our time may also be the ones who can make the biggest difference in the future," said Anne Skare Nielsen.

She compared the development from industrialization to today with a shift from Monopoly to a jigsaw puzzle.

“The 'old rules' from industrialization are like a game of Monopoly, where the goal is to collect as much as possible and eliminate all opponents. 'The new rules' are like a 5000-piece puzzle, where you have to work together in teams and contribute different pieces, so you can suddenly see the bigger picture,” said Anne Skare Nielsen.

The work with sustainability is therefore difficult and complex, and we can only succeed together.

It can therefore be a good idea to join forces with other like-minded investors who bring different skills when evaluating the investment potential of an impact startup.

ho are they really - the startups working with impact?

There are more and more good examples of entrepreneurs who start their business with sustainability and/or impact at the core of their business.

At Bæredygtig Herning, we hosted a number of startups in the fall of 2022, six of which pitched at a joint pitch event in November 2022:

• Pesitho

• Kaffepuden.dk

• LifeBonder

• Klima-Mad

• Brane

• Clutch Nutrition

Impact Program at Bæredygtig Herning

At Bæredygtig Herning, the fall of 2022 was focused on impact investing. In collaboration with Den Sociale Kapitalfond, two parallel programs were conducted: the Impact Startup Programme, where three startups went through a training program during the fall, and Investor Days, where (future) investors met to discuss various themes under the umbrella of "impact investing."
The entire program culminated in a joint pitch event in November 2022.