Can Green Be a Profitable, Fast-Growing Business – the euPOLIS Angle
The euPOLIS experts are identifying sound business models, replicable to other markets, and developing new resource activation techniques and ways to scale up Nature-Based Solutions (NBS). This will support a gradual transition to a leading market position for the euPOLIS project, moving it to the forefront of the NBS and the Blue Green regeneration.
Nature carers have traditionally been looked at as disconnected from the real world’s needs as it is now, thus the prospects of profitability have been overlooked, as the goals of the “tree huggers” have been presented as irreconcilable with the urge to produce, distribute, trade, earn… goods and services.
Venture Capital (VC) had no business in this business whatsoever, seeing nature protection as something that opposes profitable, fast-growing endeavors.
WAKE-UP CALL FOR INVESTORS
Escalating health issues in urban environments caused by pollution, heat islands, inhumane daily dynamics, catastrophic floods, fires, and extreme weather conditions have shaken everyone’s tree and led to a collective wake-up call that even nudged investors toward the realization that solving the climate crisis may require a long-term investment based on well-coordinated data-driven efforts. Even though we wish it didn’t take this long and it wasn’t totally profit-driven, it is encouraging to notice that infrastructure startups, which are capital-intensive and have a substantial physical footprint, have started gathering attention. Now, biodiversity and the restoration of nature are also on the VC radar, states the Sifted magazine.
To give this the needed magnitude, a major legislative transformation was required in both Europe and worldwide, to broaden the window of opportunity for companies and investors. According to Sifted, a significant move-up has been made since 2020, and this year’s funding reached $94m surpassing last year’s total of $90m in Europe.
Aiming to alter the urban planning paradigm and switch to a health and people-centered planning matrix, euPOLIS constantly develops and upscales new technologies, products, and services. Putting people’s health and well-being as the core values of its methodology, one of the main goals for the euPOLIS experts is to make this methodology widely available and accepted among professionals, decision-makers, and citizens. To achieve this, those products and services should not be the privilege of a select few, but must be made available on the open market.
The euPOLIS experts are identifying sound business models, replicable and scalable to various markets, and developing new resource activation techniques and ways to scale up Nature-Based Solutions (NBS). This will support a gradual transition to a leading market position for the euPOLIS project, moving it to the forefront of the NBS and the Blue Green regeneration.
A common and efficient strategy for exploiting the project findings focuses on their development and implementation, not only individually but also in collective ways, to ensure that these are taken up by the relevant stakeholders during and after the project’s lifetime. The Exploitation Strategy is a comprehensive description of the relevant activities that have taken place so far as well as those that are planned, to ensure the Exploitation and Business Plan-Development of the euPOLIS results beyond the end of the project, focusing on the preliminary strategies to be followed and the identification of key assets for exploitation. euPOLIS solutions will be demonstrated in four European cities: Belgrade, Lodz, Piraeus, and Gladsaxe. Four follower cities (Bogota, Palermo, Limassol, and Trebinje) have also been included to replicate and demonstrate the advantages of the euPOLIS innovations via mentoring and coaching.
The idea is to blow some fresh air into the local SMEs’ sails and invigorate them to turn the course more boldly towards a more nature-based way of business. Reality check: Since the signing of the Green Deal and the Green Agenda for the Western Balkans in 2020, less than four percent of state-owned and privately held companies have moved toward green businesses in this region. Upscaling their products and services and unequivocally choosing the NBS path may interest investors in taking a more open and “playful” stand toward planting their money in “green”.
COSTLY EQUALS ATTRACTIVE
The Global Biodiversity Framework launched at COP15 Montreal, and the Taskforce on Nature-related Financial Disclosures (TNFD) both mean businesses will need to start reporting and reducing the damage they do to the ecosystems in which they operate. The EU’s Nature Restoration Law, passed in July this year, aims to push this further.
It means that restoration measures will be put in place by 2030 covering at least 20% of all land and sea areas in Europe. EU member states will have to implement legally binding measures to restore ecosystems. As part of this, companies will have to be more transparent about the harm they’re causing to nature, while at the same time concretely showcasing what they’re doing to help.
“With the Act, everything is getting more and more expensive; that’s a great thing,” says Danijel Višević, managing partner at World Fund, a climate tech VC.
The cost of destroying the natural environment for businesses will rise, meaning they “need to switch to regenerative agriculture, to planting trees, to building business models where you don’t need to harm nature,” Višević explains. “Investments into these types of solutions become more and more attractive.”
On the other hand, not everyone is fully convinced that biodiversity and nature restoration have a long-term potential to preserve the interest of the VCs, and the credits seem to be the first catch to those.
-My personal take is that it’s probably going to be very difficult for VC to, in the long term, go directly into backing nature-based projects, says Agate Freimane, partner at Norrsken VC for the Sifted.
Because there are lots of startups working on biodiversity credits with few accountability measures in place, it can be difficult to know which ones are worth backing. That means there’s a lot of price volatility when it comes to cost per credit. “There’s a lot of quality issues,” Freimane says.
While nature-based investments are still sometimes met with resistance and challenges that need to be surpassed, research initiatives and projects like euPOLIS can greatly aid in bridging the gap between profitability and corporate sustainability on one side, and a happy, healthy and future powered by nature.