Category: Vana Capital & Ventures

FTSE Russell Annual Trends Report 2018 – Reasons for Investing in the Global Green Economy and Sustainability

The green economy is a significant, growing and global market opportunity for investing with good returns. Investments can also be diversified across company size, geography and industry sector. It can be definable investment priority, gather and analyze relevant data, measure positive impact in sustainability and offer good investment returns, and providing great opportunities to deliver outperformance out of the global equity market returns.

The green companies have generated higher returns than the broader equity market for the past five years.

The proof is for example FTSE Russell’s green indexes, which have outperformed their parent benchmarks over the last five years until March 2018. There are the green economy products and services companies in renewable and alternative energy, energy efficiency, water and waste management solutions that have offered good returns for investments already. There are expectations for good returns in the future too.

The Global Commission on the Economy and Climate, co-chaired by Lord Nicholas Stern, have estimated that 90 trillion USD of investments are needed by 2030 to avert more than 2 degrees of global warming since pre-industrial levels. There are many actors made global commitments to combat the climate change, broader environmental and social challenges. These huge future capital deployments provide significant opportunities for the companies involved and for investors, who align their portfolios accordingly.

What do we know about the green economy?

We know that there are many new clean technologies, green infrastructure and services emerged in the past ten years. We have approximately 3.000 global listed companies in the green economy market. They cover about 30 % of the global listed companies, which represents almost US$4 trillion in market capitalization. The green economy is similar in size to the ICB Oil and Gas sector, in which it is often compared. It has potential and predicted to grow to the size of the global health care sector in the future.

We know that the green economy have a diverse range industries, products and services addressing multiple environmental challenges. The largest is energy efficiency, which includes very diverse segments ranging from building insulation to cloud technology. These solutions have significant environmental and cost efficiency benefits. Renewable and alternative energy solutions includes both newer technologies such as solar and more established technologies such as hydroelectric. Resources are also a key area of the green economy with lithium for batteries, natural fibers for materials, organic foods and seeds for  agriculture. The global green economy is divided int the following industries and listed companies: Energy Management & Efficiency (40 %), Energy Generation (11 %), Food & Agriculture (8 %), Transport (8. %), Water Infra & Tech (7 %), Waste Management & Tech (5 %) and so on.

We know that almost 2/3 of the green economy market is made up by large cap companies, which have become more involved with the market growing and large opportunities risen in the past years. About quarter of the market are covered by mid cap companies and remaining are small cap companies. There are many innovative small and mid-cap companies, which are challenging the market shares and revenues.

We know that US market has large exposure to the green economy revenues. But Japan has also large green revenues exposure with being leader in such areas as in electric rail and cars. China is underweight as it has slightly lower green revenues exposure in public companies, but they have number of green tech companies rising and many unlisted companies growing to be listed in the future. Europe is a significant part of the green economy and revenues especially with large German and France markets with green exposure. For the investor there are some variations of geographical exposure compared with the global market in overall, but there are enough breadth already to create a globally diversified portfolio.

The conclusion is that the global green economy market size is big and grows, includes variety of industries and technologies and services companies to invest with having potential for them to grow, and also allows large potential for geographical portfolio allocation. The green economy has been and is very good investment area for investment returns by data and facts despite variety of myths and diverse views.

New Ambiguous Future Roadmap for Impact Investing and Renewal in Financial Markets

Global Impact Investing Network (GIIN) has created new vision and roadmap for impact investing and financial market renewal for the future with the support and financing from Rockefeller Foundation.

Formal global impact investing market have existed over a decade. Market, investors and investments have all grown incredible in impact investing. But these impact investments have generated only a fraction of the positive impact needed to address the global challenges facing our economies, communities and planet.

“New more ambiguous ‘Future Roadmap for impact investing’ is needed, which aims for all investments to make positive impact in sustainability and spur systemic change in the global financial markets. It is stated that all future investments and investing have positive impact in sustainability integrated in them.”

The Future Roadmap for Impact Investing includes eighteen (18) identified actions across six categories, which are strengthening the identity of impact investing, changing the paradigm that governs investment behavior and expectations, expanding the impact investment product portfolio and offering, developing better tools and services, bolstering education and training, enhancing the policy and regulation to provide better incentives to making more impact investments and generating positive impact in business.

Global Impact Investing Network (GIIN) vision is to create a world, in which environmental and social factors are routinely integrated into all investment decisions in the future.

We get the changes in businesses, in management and in investors that they will more responsibility and hold themselves accountable to multiple sets of stakeholders – shareholders, employees, customers, suppliers, affected communities, local and global environments – with their decisions. Finance theory and investment decisions will have equal weight of risk, return and impact in their considerations. The end result will be that more holistic considerations of impact becomes the default and standard in all investment and business decisions in the future rather than being just the exception in investments.

Impact Investing Value-Added

Impact investing have provided and provides much-needed capital to businesses and solutions dealing with the most critical social and environmental challenges – climate change, inequality, exclusions and so on – that we face in the world today. States, governments and philanthropy resources and capital have been insufficient to solve these problems. Impact investing and investors have implement strategies and taken actions to both bridge these gaps and finance new models for solving these critical global problems.

Impact investing and investors pursue strategies that focus on long-term value creation and good returns in the long-term and for a diverse set of stakeholders rather than only maximizing short-term profits and value for the shareholders without concern for anything else. Short-term profits, limited sighting view and related actions have been criticized by many owners, business leaders and ordinary citizens in recent times.

Ambiguous Vision and Roadmap to Impact Investing

Demands need to be raised about the potential that responsible investing and investments can impact more positively to sustainable future economic, environmental and societal development in the long-term.

GIIN ambiguous “Future Roadmap for impact investing” includes 18 concrete actions in 6 categories, in which us all and especially impact investors should promote and enhance to achieve the vision and targets set for more sustainable future. These categories for action are the following:

  1. Strengthen the identity of impact investing

“We need to strengthen the identity of impact investing by establishing clearer principles and standards for impact investing practice, articulate the defining characteristics of an impact investor and investing better, develop standardized best practices for impact measurement and management, and facilitate collaboration among and between investors with different goals and preferences.”

  1. Change the paradigm that governs investment behaviour and expectations

“We need to reshape the overarching paradigm governing the purpose and responsibilities of finance. Those who control capital must set incentives and design requirements to access their capital that align with positive impact. The theoretical models and frameworks that underpin investment practice and decisions must be updated to integrate impact alongside risk and return.”

  1. Expand impact investment product offering

“The accessibility of impact investments must be increased by developing products suitable for the full spectrum of investors from retail to institutional, and to accommodate the capital needs of various types of investees from innovative early stage companies to businesses operating in frontier markets. This will help translate the current, latent demand for impact investments into a higher volume and more impact.”

  1. Develop tools and services

“We need tools and services to support the integration of impact into investors’ routine analysis, allocation, and deal-making activities. The essential services provided by investment banks, ratings agencies, and data providers must be expanded to incorporate impact considerations and accommodate the needs of the full spectrum of impact investors.”

  1. Bolster education and training

“Education and training of professionals in finance and business is necessary to increase awareness of impact investing, maintain the integrity of practice, and drive talented human capital into the industry.”

  1. More incentive policy and regulation

“Policy and regulation can catalyse industry growth by establishing more incentives for impact investments and creating a supportive regulatory environment for investors and businesses generating impact.”

Future Roadmap and big transformative changes needed require us all to view the future as something that we can shape and create with our own actions. We are not powerless to influence and change the world. We need deliberate, focused and coordinated actions from impact investing visionaries and other visionary leaders to be committed to create new, better and more sustainable future. We need the will and determination to create something new, better and more sustainable world for all us in the future.

Vision, purpose and aims need to be clear. We need to communicate clearly and systematically these so that we can get the impact to be integrated to all finance and investment decision in the future.

 

*The GIIN is a non-profit organization that champions impact investing. Areas of work that GIIN does includes the following: industry events, industry research, education and training, and developing tools for impact measurement and management. Additional information can found at www.thegiin.org.

Brookings new report stated that the world’s 300 largest cities accelerated global economic growth and acted as important economic engines in the world economy

The Brookings Metropolitan Policy Program has just published the newest Global Metro Monitor 2018. The report findings included that 300 largest metropolitan areas in the world grew faster than the global economy, accounted for two-thirds (2/3) of global GDP growth and provided more than a third (over 1/3) of global employment growth between 2014-2016.

The largest global urban metropolitan areas are the economic growth engines of the modern global economy. These areas are creating both opportunities and challenges in an era, in which national political, economic, and societal trends are increasingly influenced by subnational interests. Report provides rare local snapshot of economic and development dynamics of the largest metropolitan areas across the world.

The Global Metro Monitor 2018, the fifth edition of the report, analyzes metropolitan areas based on a composite index combining employment and GDP per capita growth. Emerging economies metro areas continued to disproportionately drive growth, accounting for 80 percent of the 60 top-performing metro economies in the index. This urban growth story cannot be told without a deliberate focus on China, which now incredibly houses more than one-third (1/3) of the world’s 300 largest metropolitan areas.

“The findings in the report certainly reaffirm the vast economic power and reach of large cities within the global economy,” the authors note. “Yet, while some metro areas are pulling away from their surrounding regions, others are struggling to create prosperity for their citizens. In this place age, leaders at both the local and national level must possess an understanding of metropolitan economic advantages and weaknesses, with a strong focus on policies that will improve employment and incomes.”

The report also finds that between 2014-2016:

  • Metropolitan areas in China and in Asia-Pacific experienced the fastest GDP per capita growth in the world.
  • Middle Eastern and African metropolitan areas displayed the fastest employment growth.
  • Large metropolitan areas in Eastern Europe and in Central Asia expanded their employment growth even as the rest of the region stagnated.
  • Latin American metros experienced the slowest GDP per capita and employment growth.
  • North American and Western European metropolitan areas experienced only moderate growth during this period, but a strong showing in the technology sector propelled two Silicon Valley Anchors (San Jose and San Francisco), into the top four of the report’s performance index. 

Global Metro Monitor 2018 analyzes the economic dynamics in the world’s 300 largest metropolitan areas, specifically focused on employment and GDP per capita growth. Global Metro Monitor aims to capture how large metro areas are responding to continued changes in the world economy, concerns of rising place-based disparities, and how these metro areas are growing relative to their surrounding nations and regions.

The Metropolitan Policy Program at Brookings delivers research and solutions to help metropolitan leaders build an advanced economy that works for all. To learn more, please visit www.brookings.edu/metro.

 

Robeco published a report “The Truth about Sustainability Investing”

Robeco Asset Management has just published good report about sustainability investing and its 9 common myths. Sustainability investing myths evolve around performance, idealism, screening, millennials, impact, data, trillions, portfolios and emerging markets related stories opinions and views.

Sustainability investing has been around for decades, but interest has only picked up big time in the past years. The growing interest and market size have also increased the amount of stories, opinions and views.

Many people – in the investment industry and in wider society – believe that sustainability investing is a niche form of investing or do not even know about it. Some think that its focus on social and environmental issues are not relevant for companies nor investors and leads to compromising returns. Others think that these are only issues and area, which are interest only to and discussed by millennials.

Even investment professionals subscribing to the principles of sustainability investing have their doubts about how useful it can be and whether it can really provide good returns. Some believe that using environmental, social and governance (ESG) analysis works only in equities. Many think that this cannot work for developing markets. Most common notion is still that integrating ESG considerations in the investment process means sacrificing performance and returns with ideals.

Sustainability investing is subject to more myths than any other investment style.

Where does these myths and beliefs in poor performance come from?

There are many sources. Some cases adopting sustainability requires new investments and costs money to implement it in the short-term. For example energy companies focus more on renewables means retooling, new infrastructure investments and skills. Sourcing products from responsible suppliers that pay their employees properly means costs to go up and so on. These cut the short-term returns.

In theory myths mean that companies that take sustainability seriously underperform. In fact, the reverse is usually true. Companies and investors using ESG principles have shown to enhance performance with ability to reduce risks by raising all standards, cutting out bad corporate behavior, adapting better to fast changes, improve energy efficiency, enabling their employees to be more productive and so on.

Four studies and many impact funds prove outperformance

In 2015 Oxford University and Arabesque Partners examined over 200 cases, in which they concluded that 80 % of the reviewed cases prudent sustainability practices provided positive influence on investment performance. in 2016 Deutsche Bank Asset and Wealth Management division research examined the universe of 2,250 studies since 1970 until 2014, which provided evidence that ESG frame made a positive contribution to better corporate financial performance in 62,6 % and only negative in 10 % of the cases.

In 2016 Harvard Business School study provided evidence that corporate sustainability feeds financial benefits through asset value rises and higher stock price. In 2017 research paper by three academics led by Tamas Barko analyzed a dataset of 660 companies, in which companies engaged to corporate sustainability and committed to ESG provided 2.7 % better stock returns and 7.5 % share price rises. Growing body of evidence concludes that sustainable companies will reap better rewards and more returns in the long-term.

Robeco’s core investment belief is that using ESG information leads to better-informed investment decisions and also benefits society. It is about positive and negative screening, active ownership, engagement, new business models, employee commitment and efficiency, and so on helps for results.

What is the truth about the other myths?

Robeco studies have founded out that older and middle aged people are more likely to invest in sustainability funds compared to the millennials. But Millenials are more progressive as consumers to demand the companies to be transparent, sustainable and responsible.

Famous “Triple Bottom Line” phrase was coined by middle-aged British businessman John Elkington, who stated that any enterprise needed to consider the three Ps – People, Planet and Profit – as equally important for long-term success. This is the core of Sustainability Investing with ESG frame and process.

Sustainability investing market is trillions of USD (22.9 trillion USD by GSIA members in 2016), which are invested and assets under management with SI focus. Sustainability impact is measured in detail and value-add returns are important to investors. Data capture and analysis include many sources and methods, which provide good facts about impact. Sustainability investing include different kinds of portfolios of equities and fixed income investments. Sustainability investing is very big and established in the West, but there are growth and even greater potential in the emerging markets in the future.

Robeco Asset Management and Robeco SAM have been one of the pioneers in sustainability investing, in which market they have been active and professional since early 1990s.

”Circular Economy saves the Globe” seminar

MEP Sirpa Pietikäinen arranged ”Circular Economy saves the Globe” seminar, in which expert presentations by professor Markku Wilenius, director Mari Pantsar, serial entrepeneur and impact VC investor Pasi Vänttinen attracted large audiences and discussantants to restaurant School in Turku.

Sustainable development and circular economy expert Sirpa Pietikäinen kept presentation, in which she raised the importance of concrete actions to improve the use and recycling of limited resources on Earth.

Professor of Future Studies Markku Wilenius covered the topics of challenges, opportunities and needed solutions to taken in action so that we can fit and have resources to use  under only existing one globe. Finnish Innovation Fund circular economy program director Mari Pantsar spoke very clearly and logically about the issues and actions what and how we should act and do to enable the best circular economy in the future. Serial entrepreneur and impact VC investor Pasi Vänttinen focused in his presentation in the money, investment and working together as the key for smarter resource use and recycling in practice.

Member of Finnish Parliament and sustainable development expert Saara-Sofia Sirén emphasized in her final words that we need all of us – public, private and non-profits sector actors along with us as consumers – to work together to enable smarter resources use and recycling in the future.

One of the members in audience and environmental sector expert stated that “rarely one hears directly hour and half so many interesting topics and thoughts with actionable solutions about how our future and life would be safer on the Earth. Member of the audience stated also that all experts presentations and speeches were full of facts and even without the continuous power point presentations.”

Interesting discussions continued after the official part in different smaller groups between the experts and participants, which lasted several hours afterwards. Many participants presented a wish that more of these kind of seminars would be, in which we would have excellent experts providing basis for further, wider and deeper discussions in smaller groups to different aspects of the circular economy in the future.

Plantui raised new 1,4 million euro finance and signed OEM product agreement with one of the leading global home appliances manufacturers in May 2018.

Finnish smart garden developer Plantui succeeded closing new finance round, which included investments from existing shareholders and many new investors. New investors included many HNWIs f.e. one of the Supercell founders Mikko Kodisoja. Many new investors were especially attracted by the OEM product agreement signed with one of the leading global home appliances manufacturer.

Plantui aimed at getting partnership agreement with one of the leading global home appliances manufacturer, which happened and agreement was signed in May 2018.

Plantui will focus on with its global partner to R&D work, which results are presented at IFA in Berlin 31.8.2018. Plantui will also continue to invest in its own global business development, which means expansion of its resellers network in 22 countries in Europe, in Asia and in North America.

Successful finance round provide more ammunition for R&D and further international expansion.

Smart home garden and food tech market are growing extremely rapidly globally at the moment.

Plantuin tavoitteena oli kumppanuus yhden johtavan maailman laajuisen kodinkonevalmistajan kanssa, joka saatiin aikaan ja sopimus allekirjoitettiin Toukokuussa 2018.

Finance round enable the company to invest more in marketing and sales, in which special emphasis is on digital marketing and web shop, In addition, the company will continue on further investigation and development of its vertical gardening concept for professional users.

New finance round got flying start with Mikko Kodisoja, one of the Supercell founders, decision to invest in the company through his KEM Ventures company.

– Indoor gardening is globally fast growing trend. And I was impressed with Plantui product functionality and quality. Fresh herbs and salad growing supports local and natural food productions, which is in good balance with our sustainable investment philosophy tells Mikko Kodisoja about his investment decision.

Global business partner enables also many new possibilities in the future.

Plantui sales grow in Europe and Southeast Asia – new equity investments support growth

 The smart garden manufacturer Plantui has expanded into new markets in Europe and Asia, with sales operations already in 18 countries. Sales in Europe have been boosted by a retail agreement with the luxury department store Harrods. During the year, Plantui has raised more than one million euros in equity investments. With the funding, Plantui is aiming for strong growth in the Southeast Asian market.

The Finnish smart garden startup Plantui Oy successfully closed its newest funding round. In 2016, Plantui has raised more than one million euros in funding, with a third of it coming from private investors in Asia.

The company is aiming for strong growth in Southeast Asia, having established Plantui Asia LLP in December. A new sales hub will also be opened in Singapore at the beginning of 2017 to meet local demand more efficiently. An online shop, which was launched in November, is already actively serving the Singapore market.

  • “In Asia, the market for smart and indoor gardens is at a completely different level than in Finland, because many people lack the space to grow plants outdoors. Our device also saves significant amounts of water compared to traditional gardening, and Plantui grown plants contain up to five times more vitamins than plants grown using traditional methods. Indoor gardening is a fast-growing trend, and Plantui is one of the first players in the market,” says Karri Andersson, CEO of Plantui.

In Asia, Plantui’s growth strategy involves strengthening local marketing and sales efforts, thereby raising awareness about the brand. A partner in Plantui Asia LLP, John Cheah, a Singapore-based investor with extensive experience in gardening, feels that the Asian market has enormous potential.

  • “Plantui combines two aspects of international interest: food tech and Finnish design. People value Finnish design particularly in Asia. As food technology develops, vegetables will increasingly be grown where they are eaten. Plantui makes that possible in an ecological and chemical-free way,” Cheah says.

Plantui is also actively expanding its business in Europe. This autumn, the London high-end department store Harrods became a Plantui retailer and has been selling smart gardens since November. Harrods, which is particularly popular among Asian consumers, has been an important avenue for raising awareness about the Plantui brand before the busy Christmas season, and the collaboration has aroused interest in Plantui in other markets as well.

Plantui was established in 2012, and its smart gardens are currently sold in 18 countries. Sales have grown strongly during 2016 and the company is expected to double its turnover in 2017.

For more information, please contact:

Mr Karri Andersson
CEO, Plantui Oy
Mobile +358 50 3718 882, karri.andersson@plantui.com

Finnish Innovation Fund published impact investing manual for investors

Impact investing is growing fast globally. Impact investing combines financial returns and positive impact in sustainability as its main aim for investing. Impact brings third dimension to the traditional risk-return ratio consideration and valuation for investors. Impact investing manual provides overview of the market, different instruments and investment process. Please go download impact investing manual in Finnish from Finnish Innovation website from the the link  http://www.sitra.fi/julkaisu/2016/vaikuttavuusinvestoimisen-opas-sijoittajille.

 

Year 2016 in Review

Vana Capital & Ventures Invests in Plantui

Vana Capital & Ventures has invested in Finnish Design and Food Tech company Plantui, which grows across the globe and offers its Smart Garden products for hydroponic indoor gardening in 15 European and Asian countries.

There are few long-term global market trends, which are the continuous urbanization process, increasing interest in cooking and in local food along with interest in personal wellbeing and health that drives demand for new food tech solutions and products.

Plantui is a new Design & Food Tech company with focus on the growth process in hydroponic indoor gardening. Plantui combines cutting edge plant science, light spectrum intelligence & high technology packaged as a beautifully designed consumer product.

“We believe that in the future greens will be grown near where they are consumed, at home and your local restaurants. Plantui Smart Garden combined with a selection of plant capsules guarantees the best customer experience for growing your own greens at home and locally. Plantui aims to be the leading hydroponic indoor gardening company worldwide”, states Vana Capital &Ventures’ managing partner Pasi Vänttinen.

First Round of Fundraising Started

Vana Capital & Ventures has started the process of raising its first capital fund and signed agreement with international partner for advisory services.

“We have invested own money, resources and knowledge to our current target companies development and growth along with developing the company further. We have decided to take the next step, which is to raise impact venture capital fund to expand the business in the future”, says managing partner Pasi Vänttinen and continues: “We look for and plan to invest in companies, which offer solutions and impact to more sustainable urban development along with providing excellent returns and global business scalability from Finland and in the Nordics.”

Vana Capital & Ventures is a Finnish impact venture capital company, which is focused on early growth phase companies with potential for globally scalable business.

More companies joining Vana Capital & Ventures: Verso Globe abord

Vana Capital & Ventures has invested in digital responsibility technology and content platform company Verso Globe, which grows its sales in Europe.

“Sustainability, responsibility and transparency are the key issues that all companies and organizations want to improve and develop further to make them account for more to better business and policy. They are the future”, says managing partner Pasi Vänttinen.

“The world around us is changing fast. The climate change is real. The energy consumption and greenhouse gas emissions are still growing. We consume more than ever before. Natural resources are getting scarce and more expensive. The population growth appears unstoppable. All societal actors from governments to organizations and individuals need to take real action to change the course of development”, tells Vänttinen.

“The change is happening. Governments are legislating. Consumers are making different choices. Investors are shifting their strategies. Employees are voting with their feet. All this drives towards a better future. Verso digital responsibility platform and content are both an enabler of sustainable leadership and a tool for taking systematic actions towards impactful responsibility”, states Pasi Vänttinen.

Increasing ownership of African Wild Silk

African Wild Silk Limited is a start-up company, which has developed a unique process and production chain together with partners that produces fully ecological natural fibre luxury textile products for conscious people around the world.

“Ambersun baby alpaca, Kalahari Wild Silk and Finnish design are the ingredients, which are used in making handwoven fully natural products with a story behind them about sustainable development, transparency and saving the handicrafts tradition”, describes managing director of African Wild Silk, Teemu Konttinen.

African Wild Silk has entered into the initial first production and commercialization phase steps in its development, which required more capital and strengthening of the Board with some changes along within the management team. African Wild Silk named new shareholder Leena Vainiomäki as the Vice Chairman of the Board, in which role she brings in over 20 years of experience from corporate banking, finance and business development to the company. The company named new shareholder Teemu Konttinen as the CEO.

Changes in Company’s Management

Vana Capital & Ventures gets 3 new partners, Tero Toponen named as Chairman and Timo Ketonen as Vice Chairman of the Board.

Vana Capital & Ventures Board decided that it wanted to speed up its processes to be the leading Finnish impact venture capital company in the future.

“We want to be among the first in bringing the impact venture capital investment opportunity in the Nordics. We differ from many investors with our focus on impact venture capital, value based investing and a specific systematic approach to target companies development and growth”, clarifies managing partner Pasi Vänttinen.

Chairman Tero Toponen brings in his 10 years hands-on experience in start-up investing and board work managing. Tero fortifies our team with leadership, strategy, sales, customership and HR experience.

Vice Chairman Timo Ketonen brings in his experience of angel and in green start-up investments. He has also almost 20 years of professional experience as a board member and top manager in large company before. Timo strengthens our board and team with investment, ownership, entrepreneurial, leadership and marketing experience.

Board member Teemu Konttinen brings in his over 20 years of experience in luxury consumer goods. Teemu will strengthen our team also with his experience in ownership and in entrepreneurship from the past 20 years.

“Now we have our team ready to take the next steps and speed up our development to be the leading impact venture capital company and fund manager in Finland”, states managing partner Pasi Vänttinen.

 

Company has made its first investment in African Wild Silk Limited.

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