Linda Hällerstrand has interviewed senior executives from technology-developing companies that actively work with financing issues. These companies are on a growth journey, often requiring capacity expansion.
Crucial for the Transition
What sets sustainability-driven companies apart is their cutting-edge technological development, business-to-business operations, and strong focus on innovation. These companies are well-established in their respective niches and vary in size but primarily operate within the SME segment. Furthermore, they are privately owned and active in sectors such as the bio-based industry, including developing new energy sources, chemicals, and renewable materials. As pioneers in their fields, they play a crucial role in transitioning to a more sustainable society. Their challenges in obtaining financing are not due to weak financial performance.
“My dissertation shows that financiers tend to perceive these companies as unconventional or breaking norms, which contributes to their rejection for funding. Their focus on sustainability and long-term goals does not always fit within traditional bank evaluation models and financing criteria,” says Linda Hällerstrand.
How can this situation be addressed?
“Banks may need to introduce new criteria in their evaluation models that better reflect the long-term value of sustainable businesses, rather than focusing solely on traditional and historical financial data. These new criteria could emphasize the assessment of sustainability objectives,” says Linda Hällerstrand.
