The dynamics of sustainability in Finnish startups

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School of Business | Master's thesis
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This study addresses the research question of how sustainability is currently integrated into Finnish startups, and what adaptations are anticipated by these companies in response to the growing demand for Environmental, Social, and Governance (ESG) measurement and reporting practices. Using a sensemaking lens as the theoretical framework, this research investigates the approaches and challenges that Finnish startups encounter when implementing sustainability into their business operations. The findings of this study highlight that modern Finnish startups inherently incorporate a certain level of sustainability in their business models and operations, given that they emerge in an era where unsustainable companies don’t survive. Other key findings reveal that startups adopt two primary approaches concerning sustainability. Firstly, ESG can serve as a strategic evaluation tool for specific ESG components, such as prioritizing employee well-being. Secondly, there is a noticeable rise in startups with an impact-driven mission to enhance societal and environmental wellbeing. Employing a qualitative research approach: in-depth interviews with industry experts, venture capital investors, and startups, the study sheds light on the complex dynamics of ESG integration. Notably, it reveals that VC investors play a pivotal role in driving sustainability transformations of startups, challenging earlier assumptions about companies initiating these shifts independently. The study underscores the importance of startups actively collaborating with VC investors and navigating resource constraints. The study anticipates sustainability becoming intrinsic to startup operations, transcending a compliance burden. The upcoming regulatory wave is expected to act as a catalyst for internal shifts, shaping a more sustainable and resilient startup ecosystem in Finland.
Thesis advisor
Frösén, Johanna
startup, ESG, sustainability, venture capital, sensemaking
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