The Problem

We need a rapid sustainability transition of our economy and progress is too slow

All evidence suggests that we are not fast enough to prevent climate change. The latest IPCC report shows again that we are not on track to keep the global temperature increase within the 1.5°C limit that would limit the catastrophic consequences of climate change. We are also not fast enough to address the various social and environmental challenges our societies face. For instance, we are a long way from achieving the 17 Sustainable Development Goals agreed to by the member countries of the United Nations by 2030 (see UN statistics). Unfortunately, crises like Covid or the Russian invasion of Ukraine make it even harder to make progress. They distract from sustainable development. In this way, unsustainable decisions are knowingly made. For instance, Germany decided to turn on their coal power plants again, even though they know about the catastrophic consequences for climate change. Also companies begin to see the dire consequences of unsustainable development. Increasing energy prices, shortage of raw materials or supply chain disruptions threaten their resilience. We can certainly say that the overall situation is far from great. We know that we have to change, but in practice, the transition towards a sustainable economy is far too slow.

With all the challenges ahead, let’s not forget all the good things that are happening. There is good momentum.

Worldwide we see civil society demanding change with movements like Fridays for Future. This translates into changes in consumer behaviors that begin to opt for vegetarian/vegan food, they pay a premium for sustainable products or choose trains instead of planes. For innovative businesses, this creates countless profitable opportunities. Many companies also try to take actions that are not directly linked to profitable new markets, but they struggle to find suitable measures. Many actors call for regulatory actions that makes sustainability pay off. And regulators do act. Worldwide, there are more and more regulations to promote sustainability. Even though they do not go far enough, they are probably the biggest driver of structural change in our economies. Especially, the EU is taking the lead in this regard with regulations like the Sustainable Finance Disclosure Regulation or the upcoming Corporate Sustainability Reporting Directive. These regulations push financial market participants and companies towards more sustainable actions.

Most companies lack the knowledge and resources to take action on sustainability

The first priority for companies is a viable business model that allows them to cover all costs and generate some profits. In practice, this means juggling countless tasks and stakeholders to assure smooth day-to-day operations that create customer value and bring in revenues. For most companies, this is already a sufficiently complex challenge. Accordingly, sustainability topics often feel like a burden that distracts companies from their day-to-day operations. Their approach to sustainability is to comply with sustainability regulations and standards. Anything beyond compliance is driven by an opportunistic approach. They are very open to taking action on sustainability, when it is easy to do and when it pays off quickly (sustainability quick-wins). But more complex and resource-intensive efforts are often limited to larger corporates (with deep pockets that can afford to hire sustainability experts) or mission-driven management teams in smaller companies. Millions of small and medium-sized companies simply do not have the time and resources to assess sustainability topics in more depth and derive meaningful improvement actions. They already struggle when they have to satisfy the growing reporting requirements. So they focus on mandatory reporting and not the needed sustainable transformation.

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Solution

At ImpactNexus, it is our goal to make it easy for millions of companies worldwide to go beyond reporting. We want to help companies comply with regulations, but want to do more. We want to help speed up the transition to sustainable business models. We use technology to help companies navigate sustainability risks, find opportunities and enable them to create a positive impact. In our work we follow 3 main convictions:

(1) We must help companies to go beyond reporting. Technology can help companies significantly reduce the effort around reporting. From data collection to KPI calculation and report generation technology can help. But this can only be the starting point. We can also use technology to make it easy for companies to improve by identifying sustainability risks and opportunities. Technology can bring actionable insights to companies at a fraction of the costs of human experts. We work towards a future where most of the assessments and research are automated so that companies do not have to use their resources for costly assessments and reporting, but instead, they can invest them into actual improvements. This in turn creates resilient, sustainable business models that are good for profits, people and planet.

(2) We can use technology to make the world’s knowledge on sustainability more accessible. The complexity and interdependencies of sustainability are too overwhelming. There is constantly new knowledge about the potential harm and benefits of certain economic activities. We are building an impact knowledge database that structures all the knowledge humanity has on the social and environmental impacts of products and services. Based on this structured knowledge, we can use technology to assess the sustainability of companies much faster and provide them with tailor-made improvement suggestions. Thanks to the economies of scale that technology offers, we can do this at a low cost, keeping knowledge affordable for decision-makers around the world.

(3) We can use software and UI/UX to make sustainable decision-making easy. Taking action on sustainability quickly becomes confusing, it creates too much effort, and eventually, companies do nothing. We believe that we have to make it easy and guide users to actions that make sense for their business step by step. Our team of experts builds easy-to-use frameworks aligned with international standards and guidance material to make the process as painless as possible, so companies won’t get lost in the regulatory requirements and can easily identify the most relevant risks and improvement levers.

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Our ambition

Reduce the effort related to sustainability by a factor 10 for millions of companies.

Currently, sustainability reporting and improvements of the business strategy means spending weeks on comprehensive assessments and reports (by costly consultants or in-house), which means it’s mostly feasible for large corporates. With our sustainability management software and tailored improvement suggestions we will

• Reduce the cost/time spent by a factor of 10, so companies can put their efforts and money where they should: implementing the change
• Reach millions of companies that don’t yet include sustainability in their decision-making to accelerate the sustainability transition of companies worldwide.

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