Will Impact Investing Save The World? Interview with Łukasz Blichewicz, CEO Assay Group
It is a well-known fact that if we delay taking urgent action on environmental issues, the future could turn out to be rather sad for the planet and its people.
This is true, and to avoid this, humans must change their attitudes and start driving sustainable projects to prevent permanent climate and environmental changes. A report on the threats to the world – The Global Risks Report 2023 – developed in connection with this year’s economic summit in Davos shows that over the next 10 years the greatest threats to the world are environmental – making up as many as 6 items out of 10. It is therefore clear that in the next decade our efforts must focus on this area, and it is probably not without reason that the first letter of the ESG acronym reads Environmental.
These three letters ESG, i.e., Environmental, Social, Governance are now widely used across all sectors and spheres. Why?
We know that to be able contribute to lasting changes, urgent action is required in these three areas. In addition to the environment, of key importance are projects that take into account the social aspects of work and life, but also national and internal corporate regulations. As social awareness grows, consumers are increasingly interested in ethical business practices and, based on their own beliefs, are more inclined to choose the offerings of companies that place environmental and social issues high on their agendas.
And what about young ventures, or startups – do they want to follow the sustainable path?
Absolutely. Let’s not forget we are all part of a community, we live our lives here and now, and we see what is happening in the world and where this is all going; many of us feel they need to do something good for the planet. More and more people decide to start businesses that have a positive impact. I would say they are now the driving force of the change, and at the same time respond to the expectations of a growing group of consumers.
How can these positive projects become more visible in the market?
There is quite a plethora of different programs to support fast-growing startups, but the Polish market is highly saturated and competitive, and showcasing a major sustainable idea, however disruptive, may prove a considerable challenge. We understand this and that is why have decided to help startups present their innovative solutions for people and the planet. Earlier this year we announced the Assay SUPERHERO competition for impact-driven startups, with the final held in late April during the Assay SmartUp Day conference.
Why did you feel this was necessary?
First of all, because we had not been aware of a similar platform in Poland. We wish to identify and appreciate innovative solutions that pave the way for environmental and social change. We developed the Assay SUPERHERO competition, with the acronym reading Start Up Positive Effects Recognition to Help Earth Regain Ownership. This definition was also the basis for evaluating the startups which submitted their applications – the actual superheroes fighting for a better future. In addition to business potential, the judges also looked at social commitment, care for the natural environment, ethics, as well as transparent operations. The competition complies with the 17 UN Sustainable Development Goals, and the final took place during Earth Month.
Where did the idea for Assay SmartUp Day come from and what is it about?
This is quite an interesting play on words, because startups tend to think and work smart, with a strong focus on growth, taking action, and adapting behaviour to changing events and situations. When developing an idea and later implementing one, startups should be able to respond to changes in a flexible manner, i.e., act smart.
In addition to the final of the Assay SUPERHERO competition, which was part of the conference, we decided to invite experts recognized in the industry for their activity in the area of promoting sustainable approaches. Among our guests were representatives of organizations such as ImpactAngels.pl, the Kozminski University, Deloitte, B Corp, Huge Thing, the Polish Association of Capital Investors, WWF, EIT Climate-KIC, impact-driven startups, and even the author of books about Polish female startup founders developing their ventures around the world. Also present were representatives of investment funds, incubators, accelerators, startups, investors, business angels, entrepreneurs, and innovators. Some of the reviews shared with us by partners and attendees have confirmed this type of event is very much a valuable project.
Can venture capitalists positively influence the changes positively affecting the world?
Sure, they can, and even should, but… Reports have confirmed the potential for better financial performance by companies implementing the principles of ESG and investors indicated they would be willing to pay 10% more on average for companies with a positive ESG impact. So much for the declarations, but we need to know that comprehensive quantitative evidence in that area will take more time. As such, the implementation of ESG practices by venture capital firms requires experimentation. Courage is needed to invest in technologies that may not be commercially viable at present but can ultimately change the world. On the other hand, private investors may not be able to do this alone and institutional support will be necessary.
What kind of support are we talking about, and what sectors do you have in mind?
Let’s take EU’s Net-Zero Industry Act, for example, which provides that a minimum of 40% of green-tech solutions should be developed in the EU market by 2030. The goal is to meet EU’s goal of becoming climate neutral by 2050; similar governmental support is offered in the USA and China. The European Parliament has just adopted the “Fit for 55” Directives and Regulations, intended to cut greenhouse gas emissions by at least 55% by 2030 and achieve climate neutrality by 2050.
Clean energy investments are doing quite well – the total 2022 value worldwide exceeded $16 billion across 600 transactions2. In Poland over the past year the main focus was the search for fossil fuel alternatives, the uncovering of biogas potential, with significant increases recorded in the solar energy industry. PV technologies, onshore and offshore wind farms, batteries, geothermal energy, renewable hydrogen, biomethane and nuclear energy will certainly remain the key areas. It is worth paying more attention to these, not only because they are attractive investments, but also because they are good for the world.
Will these investments help save the world?
Climate change, currently the most urgent problem to solve, is a major challenge which requires joint action by many stakeholders, including companies, funds, NGOs, as well as regulators. It is necessary to accelerate the commitment of funds to relevant projects, facilitate partnerships in the ecosystem, and enable faster scaling of innovative solutions. It remains to be seen whether, as humanity, we will be able to cope with the environmental and social challenges.
Łukasz Blichewicz—founder and CEO of Assay Group, an investment fund supporting the development of Polish start-ups. Expert in the field of financing technological companies, supporting their growth through economic consulting, audits, and market research. Has relevant corporate experience, e.g., at Nestle, where he held a various managerial functions and participated in cost and process optimization projects. A business administration graduate with two specializations – finance and strategic marketing.
Last Updated on June 19, 2023 by Anastazja Lach