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Securing the backbone of the digital economy: strengthening cybersecurity for SMEs

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Small and mid-sized enterprises (SMEs) are the backbone of Europe’s economy, representing 99% of all businesses. They employ 80 million people in the EU, drive innovation, and power the supply chains that keep industries running. Yet in today’s connected economy, they have also become the most exposed link.

Cybercriminals know that SMEs often lack the tools, systems, and resources to defend themselves. A single breach can paralyze operations, compromise sensitive data, and open the door to attacks on larger partners. What was once a local business risk has become a systemic threat. When one SME in a supply chain is compromised, the ripple effects can reach critical infrastructure, healthcare, and government services.

Cybercrime already costs the global economy ~3% of GDP every year, and yet up to 95% incidents go unreported, hiding the real impact on the economy, business and people. For SMEs, the challenge is not awareness but access. Security tools are often too complex, too costly, or simply out of reach.

Cybersecurity can no longer be a privilege of large businesses. Scalable, accessible solutions are essential for building digital resilience across the entire economy.

The widening protection gap is both a systemic challenge and a major investment opportunity. Demand for cybersecurity solutions is growing at double-digit rates, yet SMEs remain dramatically underserved. Investing in technologies that make advanced protection affordable and easy to deploy is critical. Not just for risk reduction, but for the stability of Europe’s digital economy.

Investing in scalable cybersecurity solutions

Summa’s investments in FAST LTA and Logpoint are examples of this opportunity.

FAST LTA, a German data solutions provider, offers high-security, immutable data storage and archiving for critical sectors. Its technologies ensure long-term data integrity, even in the face of ransomware. By keeping data under local control and within EU jurisdiction, its solutions strengthen digital sovereignty and resilience where it matters most.

Logpoint, a Danish cybersecurity software company, helps organizations detect, respond to, and prevent attacks through its European-native technologies. In a market dominated by US providers, it offers a trusted alternative built on European values of privacy and security. This is critical when up to 84% of European organizations see reliance foreign cybersecurity as a strategic risk.

Crucially, Logpoint uniquely enables SMEs, those most exposed and least protected, to strengthen their defenses. As more businesses adopt its service, the network effect amplifies resilience across entire value chains, improving overall security for society.

Both companies show how European innovation and investment can reinforce digital sovereignty and resilience, while delivering competitive financial returns.

Protecting SMEs is not just about preventing cyberattacks. It’s about safeguarding the networks, data, and services that the wider economy depends on. By investing in solutions that make cybersecurity scalable and accessible, Summa is helping ensure that every organization, large or small, can operate securely in a digital world.

Download our latest report to explore the full investment opportunity in cybersecurity.

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  4. Summa Equity wins double honors at Real Deals Sustainable Investment Awards 2025

Summa Equity wins double honors at Real Deals Sustainable Investment Awards 2025

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We are delighted to announce that Summa has been awarded PE House of the Year: Mid-cap and Impact Fund of the Year: Performance at the Real Deals Sustainable Investment Awards 2025. These awards recognize our continued commitment to investing in companies that solve global challenges and deliver strong financial returns.

Being recognized in both categories is a testament to our belief that solving global challenges is not just a moral imperative – it’s a business opportunity. Our thematic investment strategy is built around megatrends shaping society, and this award validates our approach to aligning purpose with performance

Our strategy is designed to scale solutions that matter. We focus on companies driving transformation within Circularity, Sustainable Foods, Tech-Enabled Resilience, and the Energy Transition – areas we believe are essential for building a future shaped by sustainability and long-term value creation. This recognition reflects the hard work of our teams and the impact of our portfolio

By investing in scalable, cash-flow-positive businesses that address systemic challenges, Summa continues to demonstrate that impact and performance can go hand in hand.

We thank our portfolio companies, investors, and Summates for their dedication and belief in our mission. Together, we are building a more resilient and sustainable future.

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  4. Investing in cybersecurity for a secure and resilient digital future

Investing in cybersecurity for a secure and resilient digital future

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Cyberattacks are escalating, costing the global economy the equivalent of ~3% of GDP every year. At the same time, markets that enable a safer and more resilient digital future could grow more than fourfold to around USD 1 trillion by 2040. Together, this creates one of the most urgent and attractive investment opportunities of the decade. 

Today, the global ICT sector contributes USD 6.1 trillion to the global economy, about 6% of global GDP, and is growing twice as fast as the global economy. Yet defenders are falling behind. Critical systems that power everything from smart grids to digital governance are exposed to theft, disruption, and manipulation. Closing this gap will require over USD 1230 billion in R&D and capital investment over the next 15 years.

Investing in cybersecurity solutions is not only about preventing attacks. It’s about safeguarding the foundations of our digital economies and ensuring that they remain a net positive force for society.

Our latest report, developed as part of Summa’s Tech-Enabled Resilience thematic investment strategy, highlights priority areas where investment can deliver strong returns alongside measurable societal impact, including identity and access management, data security, endpoint protection, and managed security services. With cybersecurity spending expected to quadruple by 2040, the sector offers both strategic importance and strong market potential.  

Our investments in Logpoint and FAST LTA show how cybersecurity solutions can strengthen digital sovereignty while offering competitive financial returns. 

By directing capital into these solutions, we can help significantly reduce global damages from cybercrime annually, protect essential services, and build a more resilient and secure digital future. This is both an urgent necessity and significant opportunity for investors and entrepreneurs alike.  

Download our latest report to explore the full investment opportunity in cybersecurity. 

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  4. The case for scalable regenerative agriculture 

The case for scalable regenerative agriculture

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The current trajectory of our global food and agriculture system presents unsustainable environmental and economic risks.   

Intensive production methods have led to environmental degradation, social inequities and declining nutritional value. This has caused societal harm estimated at over USD 15 trillion, surpassing the sector’s contribution to global GDP. 

Summa recognizes this critical juncture as both a challenge and a compelling investment opportunity. Investing in sustainable food and agriculture plays an important role in reducing pressure on the food system and finding new pathways for sustainable growth.  

Summa’s investment strategy aligns with these opportunities, targeting areas including alternative proteins, NextGen agriculture, food waste reduction and the organic foods market. One example of this is Summa’s investment in Nutris, a leading plant-based protein provider headquartered in Croatia. 

Nutris demonstrates how regenerative agriculture can be implemented on a large scale, offering a cost-neutral transition for farmers. In 2024, 15% of Nutris’ farmed land had implemented regenerative farming practices. By 2028, they aim to reach 40%.  

Nutris showcased the effectiveness of their methods in a 1,000-hectare project in Croatia involving 67 farmers. After just one year, the results were significant: a 30% reduction in synthetic fertilizer use while maintaining crop yields.  

Soil health improved, with increased organic matter and water retention. This project proves that regenerative agriculture can be adopted at a commercial scale, benefiting both the environment and farm profitability.

Nutris shows that regenerative agriculture can be implemented at scale without adding cost for farmers. We’re excited to support a company that’s turning sustainable practices into practical results

To learn more about Nutris and the investment opportunity in sustainable food and agriculture, read our latest report, Investing in food and agriculture for health and planetary resilience’.

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  4. Investing in food and agriculture for health and planetary resilience

Investing in food and agriculture for health and planetary resilience

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The global food system is at a tipping point and with it comes a multi-billion-dollar investment opportunity.

Regenerative agriculture alone could see a threefold market increase by 2035, yet current funding meets just 10% of what’s needed. That gap signals a huge opening for private capital to step in and scale transformative solutions. This is a pivotal decade to invest in systemic transformation.

By investing in regenerative and plant-based food systems, we can restore ecosystems, improve human health and reduce emissions. But time is short. Without bold investment and innovation today, we risk locking in an unsustainable status quo.

Summa is committed to driving systems change in food and agriculture. Our strategy is built to seize this moment and invest in future-fit companies that will define the food system of tomorrow. This means we invest in industries supported by megatrends within four themes: Circularity, Sustainable Food, Energy Transition and Tech-Enabled Resilience. Within our Sustainable Food investment strategy, we target four high-impact areas within food and agriculture: alternative proteins, NextGen agriculture, food waste and the organic foods market.

By backing innovative companies such as Nutris and Holdbart, we aim to catalyze scalable solutions that are both commercially viable and environmentally responsible. Investing in sustainable technologies, regenerative practices and nutrition-focused solutions has the potential to unlock both long-term financial value and impact.

To learn more about this investment opportunity, read our latest report, Investing in food and agriculture for health and planetary resilience.

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  4. Measuring what matters: How impact accounting redefines sustainability measurement

Measuring what matters: How impact accounting redefines sustainability measurement

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Key concepts of impact accounting

Summa’s journey on impact accounting

At Summa, we believe investments can provide new and innovative solutions for a more future-proof world. We invest to solve global challenges. To further align our portfolio with this mission, we started applying impact accounting in our annual reporting process in 2019. This approach ensures we continue to look at investments based on risk, return and impact.

Our journey began with the Impact-Weighted Accounts (IWA) project at Harvard Business School in 2019. We started with a pilot project to demonstrate the usefulness of measuring climate and employment impacts in monetary terms for a select number of companies in our portfolio. Building on this foundation, we now use impact accounting to measure climate and employment impacts for all our portfolio companies. The below is an example of climate and employment IWA for Summa’s portfolio company NG Group for 2023.

 

 

We also did two pilots on consumer impact for portfolio companies Milarex and Pagero together with researchers from Harvard Business School.

When the IWA research project at Harvard Business School came to an end in 2021, the International Foundation for Valuing Impact (IFVI) was established as an independent non-profit organization to further advance standardization of impact accounting. Since its launch in 2022, IFVI continues to build on the results of the IWA project and lead the development of standardized impact accounting practices. Summa has partnered with them to advance the field of impact accounting and pilot methodology updates as they become available, recognizing the importance of standardization when it comes to impact accounting.

We were interested in continuing our work on impact accounting and expanded the practice further across our portfolio in 2024. To support this effort, Summa engaged the consultant Valuing Impact to apply impact valuation across more aspects of our portfolio companies, recognizing their expertise in implementing these practices. We also employed Valuing Impact’s methodologies where specific impact methodologies have not yet been developed by IFVI. Valuing Impact remains a valuable partner in helping us make our impact data actionable both for us as investors and for our portfolio companies. They support us in applying impact valuation more widely across our portfolio, which means we can drive better outcomes for all stakeholders. So far, we have done pilots for portfolio companies Oda, Axion and Logpoint, one from each thematic investment area resource efficiency, changing demographics and tech-enabled transformation.

This journey reflects our commitment to transparency and sustainability, ensuring that both financial and impact performance are key to assessing the value of our investments. Through impact accounting, we can more effectively measure and manage what truly matters and address the world’s challenges to make it a better place.

Taking a step back, let us bring some clarity on the different terms that are key in impact accounting, such as impact valuation, reference scenarios and impact pathways.

What is impact accounting vs impact-weighted accounts?

Impact-weighted accounts was the term previously used for impact accounting during the proof-of-concept testing at the IWA project at Harvard Business School. During its existence IWA made groundbreaking strides in advancing the idea of financial accounts that reflect a company’s financial, social and environmental performance. By 2021, it had achieved proof of concept for impact accounting, demonstrating both feasibility and value, with more than 20 papers, two dozen pilots and four published datasets displaying monetized impact figures for over 6,000 companies.

With this validation of its work, most significantly in the call to action from the G7 Impact Taskforce for “mandatory accounting for impact as a destination,” the time was right to scale the work of translating company impacts into currency.

A name-change in 2022 to impact accounting was completed based on stakeholder feedback. The impact-weighted accounts terminology often led to the false assumption that impact accounting was being designed to replace financial accounting, as opposed to supplement it. The terminology change helped clarify the intended separation between financial accounting and impact accounting. These are parallel systems that can be intertwined but are not meant to replace one another.

Impact accounting describes a system similar to financial accounting. It measures and values the impacts of corporate entities, generating impact information to inform decisions about an entity’s effects on sustainability. This is the same concept as impact-weighted accounts; the changes was purely in terminology, not in meaning.

How is impact accounting related to impact valuation?

  • Impact accounting

     

    As outlined in IFVI’s General Methodology, impact accounting is the “system for measuring and valuing the impacts of corporate entities and generating impact information to inform decisions related to an entity’s effects on sustainability”. It focuses on generating impact information that reflects the effects of an entity not captured in financial accounting. Impact accounting emphasizes consistent and comparable metrics that translate these non-financial impacts into monetary terms, much like traditional financial accounting translates business transactions. It is designed to integrate with existing financial reporting systems, providing a holistic view of performance based on risk, return and impact. Impact accounting makes impact data accessible, actionable and comparable for real-time decision-making.

     

  • Impact valuation

     

    While impact accounting is the system for measuring and recording the impact data, impact valuation refers to a specific step in the process of preparing impact accounts. Specifically, the step of valuing an impact in monetary terms. Valuation involves assigning a specific financial value to an impact that has already been identified and measured. Impact valuation is a critical step within the broader process of impact accounting, with valuation serving to quantify the significance of the impacts recorded. Impact valuation can also be used to assess business risks related to the impact drivers used to measure societal value. This falls outside the definition of impact accounting, as impact valuation can also cover financial impact in parallel to non-financial impacts.

     

In summary:

1. Impact accounting captures and records non-financial impacts systematically.

2. Impact valuation assigns financial value to those recorded impacts. It is a step in the process of creating impact accounts, and sometimes also takes into account the risk perspective.

What are reference scenarios?

The methodologies developed by IFVI are intended to provide a baseline for the preparation of impact accounts. The IFVI methodologies guide companies to take a systematic approach to measuring positive and negative impacts that a company and their value chain generate by using a “zero-reference scenario”, which measures absolute impact of an entity. In other words, it assumes none of the measured impacts would occur in the absence of the company’s actions.

IFVI’s methodology suggests that comparing actual impacts against this baseline enables a clearer understanding of the net effects of a company’s operations as it reduces estimation errors by eliminating assumptions that changes would occur even without the company’s intervention.

Despite this reference scenario, there will be use cases where different reference scenarios need to be used. For example, to utilize impact measurement to assess the additionality of investments, or the difference in the impacts of a specific investment compared to an investment in the standard market alternative. In such cases, the reference scenario is the impact of an investment in the standard market alternative, as opposed to zero. In both cases, the transparency around reference scenarios is key.

What is an impact pathway?

The elements of an impact pathway overlap with the elements of the theory of change framework and are typically modelled as follows:

When making the impact valuation exercise, the reference scenario comes into play. Regardless of which type of reference scenario chosen, it refers to the activity to which we compare the company’s activities (the so-called counterfactual) and which in the end leads to the change in outcomes or impact:

Why is impact accounting necessary?

Impact accounting brings practicality to the complex world of corporate sustainability disclosure. Translating environmental and social impact to the language of currency makes information about impact accessible, actionable and comparable. Once impact is monetized, it can be measured and managed strategically, using the same infrastructure that already exists for financial management.

Together, financial reporting and impact accounting lay the foundation for a comprehensive assessment of an entity’s performance. Companies, investors, regulators, policymakers, employees and consumers can then make better decisions for people and the planet.

Why is impact accounting needed if companies are already reporting on sustainability?

Over the years, there has been a significant development in the number of companies reporting on sustainability topics. While this development was aimed at meeting expectations from investors, companies and their stakeholders, it has also been limited. Current metrics are difficult to understand and compare, as they are often presented in highly technical and idiosyncratic units of measurement. For example, comparing an organization’s Total Recordable Injury Rates, which measures employee injury rates, with the tons of CO2e (or carbon dioxide equivalents) it emits is difficult to do. They also frequently measure inputs and activities of a business, rather than actual impacts and outcomes, which further limits their potential to drive meaningful change.

Why should investors adopt impact accounting?

Why is impact accounting needed if companies are already reporting on sustainability?

Investors can leverage the data provided from companies in their portfolio to understand the risks, opportunities and impacts across their portfolio, to identify future investment and engagement opportunities. It enables the measurement of outcomes instead of activities and outputs. Some of the use cases for investors include:

  • Fruitful engagement with portfolio companies: By embarking on a journey together to monetize the impacts of a portfolio company, the investor and company teams can gain a deeper understanding for the impacts and identify collaboration opportunities.
  • Improved decision-making: Assessing and comparing total social value of companies can inform due diligence and investment decisions – an opportunity to monetize the theories of change that Summa develops for each subtheme.
  • Greater portfolio-level visibility: Increased transparency around potential risks and opportunities to enterprise value and understanding of their nature and magnitude.
  • Enhanced portfolio comparison: Greater comparability across companies and better understanding of the total social value created and/or destroyed across a portfolio.

Please reach out to our impact team if you want to learn more: impact@summaequity.com or sign up for our newsletter to get updates directly in your inbox.

Who is IFVI?

The International Foundation for Valuing Impacts (IFVI) is an independent nonprofit bridging the gap between financial accounting and impact measurement. IFVI works to create a just and sustainable economic system built on the full contribution of business to people and the planet. Their mission is to build and scale the practice of impact accounting to promote decision-making based on risk, return, and impact. IFVI grew out of the Impact-Weighted Accounts (IWA) Project at Harvard Business School and was established as an independent non-profit organization in July 2022.

This article is informed by methodologies from the Impact-Weighted Accounts project at Harvard Business School, the International Foundation for Valuing Impacts (IFVI) and the Value Balancing Alliance (VBA), and Valuing Impact.

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  4. Investing in sustainable aquaculture for a resilient food system

Investing in sustainable aquaculture for a resilient food system

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Stockholm, October 7th – A report published today by Summa Equity (“Summa”), as a part of its food system transformation series, identifies the future state of salmon aquaculture could yield EUR 1bn in savings, close half of the anticipated feed gap, and cut CO2 emission by two-thirds.

Aquaculture, or the farming of aquatic plants and animals, plays a vital role in addressing the growing global demand for sustainable protein sources.

This report explores the opportunities and challenges within the aquaculture sector, particularly the farming of salmon. It focuses on sustainable practices that align with ecological boundaries and the broader goals of the global food system.

Current aquaculture practices face sustainability challenges, such as habitat destruction, unsustainable feed sourcing and the management of pathogens and parasites. Despite these challenges, innovative solutions and technologies are emerging, including closed-loop systems, land-based farming and alternative feed ingredients. These innovations not only address environmental concerns but also offer compelling investment opportunities, particularly in the farmed salmon sector, which has grown significantly due to its efficiency and lower resource intensity compared to other protein sources.

Summa’s investment strategy aligns with these opportunities, targeting areas such as land-based and closed-pen farming, preventative measures to improve fish health and alternative feed ingredients. Investments in Nofitech and STIM exemplify commitment to supporting sustainable aquaculture practices that enhance both industry profitability and environmental responsibility.

As the aquaculture industry evolves, a systems-based approach that anticipates and adapts to emerging challenges will be essential. Summa is well-positioned to lead in this transformation, ensuring that aquaculture contributes to a more sustainable and resilient global food system.

Are you interested in learning more? Download the full report via the button below.

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  4. Report on climate and nature 2023

Report on climate and nature 2023

We are facing an existential environmental crisis. Climate change, depletion of natural resources, and biodiversity loss are all major issues that need to be addressed.

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4 min read

A forceful response is necessary, which will require a paradigm shift in human activity to mitigate and adapt to the impacts of these issues. It is vital that immediate action is taken to address these issues, as the longer we wait, the more difficult and costly it will be to solve them.

Summa Equity (“Summa”) has chosen to align with the frameworks Task Force on Climate-related Financial Disclosures (“TCFD”) and Taskforce on Nature-related Financial Disclosures (“TNFD”) to support the work of identifying and managing climate and nature-related risks and opportunities.

TCFD and TNFD framework

  • Governance

    A. Board of Directors
    B. Management
    C. Human rights

  • Strategy

    A. Identified impacts, dependencies, risks and opportunities
    B. Effects on Summa’s investment strategies
    C. Scenario analysis
    D. Geographical presence

  • Risk management

    A. Identification of impacts, dependencies, risks and opportunities
    B. Management of impacts, dependencies, risks and opportunities
    C. Integration of climate- and nature-related risks into risk management

  • Target and metrics

    A. Metrics for assessing risks and opportunities
    B. TCFD: Reporting concerning greenhouse gases. TNFD: Metrics of nature-related impacts and dependencies
    C. Targets

Governance

Summa’s management of climate and nature-related dependencies, impacts, risks, and opportunities

Summa is a purpose-driven, thematic investment firm that invests in and develops companies that provide new and innovative solutions for a more future-proof world. Summa is owned by its partners and the Summa Foundation.

Governance of our commitments and actions on climate and nature sits at the highest level of Summa – the Summa Board. The CEO has the overall responsibility for the operational work on climate change, depletion of natural resources, and biodiversity for Summa, but the strategic work is developed together with the thematic partners, the management team, and the impact director.

Strategy

The effects of climate- and nature-related dependencies, impacts, risks and opportunities on Summa’s business model and strategy

Summa was founded in 2016 with the aim of investing to solve global challenges. This means that Summa does not only manage the risks related to climate and nature, but also actively invests in companies that contribute to solving challenges related to climate and nature through their products and/or services. We fundamentally believe that this approach does not only futureproof the portfolio in terms of sustainability, we believe that it is also a prerequisite for good long-term financial returns. Summa integrates sustainability considerations, including climate and nature impacts throughout screening, analysis, due diligence, and the path to value creation.

Summa does not invest in certain sectors that are considered high-risk from a climate and nature perspective, e.g. fossil fuels, and mining.

Through active dialogue and collaboration, Summa also works to influence positive change within its portfolio, fostering a culture of sustainability and resilience, e.g. through impact roundtables where we invite representatives from the portfolio companies to discuss sustainability-related topics, including climate and nature.

In addition to risk mitigation, Summa seeks to capitalize on emerging opportunities arising from the transition to an economy within planetary boundaries. By investing in innovative solutions and technologies that address climate and nature-related challenges, Summa aims to generate positive environmental impact while delivering attractive returns for its investors.

Risk management

Identification, management, and integration in Summa’s overall risk management of climate and nature-related dependencies, impacts, risks, and opportunities

Summa has established processes to identify, assess, prioritize, and manage climate and nature-related risks throughout the investment process.

Climate and nature-related risks are systematically identified, assessed, and managed across the organization’s operations and investment portfolios. Summa integrates climate and nature-related risks into its overall risk management system and key risk indicators (“KRI”) reporting process. By incorporating climate and nature considerations into its risk management framework, Summa strives to mitigate potential adverse impacts on financial performance, operations, and stakeholder trust.

Metrics & targets

Metrics and targets used to assess and manage climate- and nature-related impacts, dependencies, risks and opportunities

Given the size of the companies Summa invests in, there are certain limitations to the data available on climate and nature, especially regarding supply chains. During our ownership, we support portfolio companies to become more mature on all climate and nature-related aspects, including identification, prioritization, management, and reporting.

All portfolio companies are required to report their GHG emissions and other sustainability-related information on an annual basis. The reported data is used to measure nature impacts based on Life Cycle Assessment (“LCAs”) in line with the European Commission’s Environmental Footprint (“EF”) method and use sector-based data through the ENCORE tool for a top-down assessment of the portfolio.

Summa has set Science-Based Targets (“SBTs”) for climate, including a commitment to align portfolio companies’ emissions reductions initiatives with the Science-Based Targets Initiative, ensuring that our investments contribute to global decarbonization efforts. Summa is still evaluating concrete nature-related targets, but the overall objective is to contribute to a positive development where nature, including biodiversity, ecosystems, and natural capital, is protected and thrives.

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  2. Reflections on Summa’s early steps towards impact-weighted accounting for consumers

Reflections on Summa’s early steps towards impact-weighted accounting for consumers

Summa Equity has once again partnered with the International Foundation for Valuing Impacts to advance Impact-Weighted Accounting for our portfolio companies. This article focuses on Summa’s learnings from two years of piloting Consumer IWA, as well as Summa’s broader ambitions and predictions for the future of social and environmental impact measurement.

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8 min read

Our hope is that the reflections in this article will contribute to the growing debate and dialogue around the impact of corporate activities on society and encourage asset managers to adopt impact monetization methodology. For more resources on the IWA methodology and guidance on implementation, please refer to the IWA Project @ HBS.

The case for impact accounting

There is a growing recognition of how corporate activities contribute to some of today’s greatest challenges, including wealth inequality and climate change. Regulatory standards have accordingly begun to reflect a growing desire to understand the impact companies have on a range of stakeholders, including employees, consumers, and the natural environment. Companies and investors are working to align on new standards but face little cohesion or consistency in how to comprehensively account for the impact created (and destroyed) for society and its stakeholders. Herein lies the potential of IWA.

IWA captures the positive and negative impacts of a company and translates those impacts into monetary terms. All companies generate impact on stakeholders, but few companies have clear metrics to measure and manage their impacts or processes to understand impact in relation to financial value.

IWA can help improve decision-making for management teams, investors, and consumers – for example, year-over-year analysis can enable GPs to understand how the impact of their portfolio has changed over time or highlight strategic opportunities to increase impact. Moreover, when industry-level analysis is available, GPs can understand how their portfolio companies compare against those within the same industry.

At Summa, we see impact accounting as a foundational tool for advancing a more stakeholder-centered economy. Given IWA is in its early stages of implementation, Summa acknowledges the complexity herein and is committed to translating the academic nature of the methodology into a standardized and accessible process for asset managers and their portfolio companies. As early adopters of IWA, we hope our learnings and reflections will encourage others to adopt and implement this methodology.

What we have learned

Last year, Harvard Business School (HBS) led the pilot Consumer IWA analysis for two Summa portfolio companies: Milarex, an international seafood company, and Pagero, a global network enabling automated business transactions. This year, we revisited the two pilots to advance their underlying impact frameworks to establish the baseline for future iterations of IWA analysis. Below, we discuss our key observations from revisiting these two pilots.

Please refer to Summa’s annual reports for more detail on the analysis:

Monetization is only as powerful as the data available

Consumer impact-weighted accounting can be understood through three main steps:

  • 1.

    Identifying and mapping the primary pathway(s) through which a company’s core products and/or services affect its consumers and their communities;

  • 2.

    Quantifying these impacts using company data to estimate the scale of impact and a combination of industry data and best-in-class research to capture change in consumer well-being; and

  • 3.

    Valuing the change in well-being using monetized coefficients.

This process depends on the data availability and quality of monetization assumptions attributed to social and environmental impacts.

Data availability

At the company level, it is common to track sales data like volume and type of sales. However, we found that companies often lack other consumer demographic data that is central to Consumer IWA analysis. Customer reach data, which is critical to understanding the scale of a company’s impact, is often unavailable for companies that sell their products to retailers.

In the case of Milarex, we got around this limitation by applying country averages of annual seafood consumption per capita and deriving an estimate of total consumers. To accurately estimate the health benefits of Milarex products, which are one of the largest drivers of its consumer impact, we made further assumptions around the demographics of the customer base based on public data and academic research (e.g., consumers by age group, average seafood consumption per consumer).

Pagero posed a similar challenge that is common among B2B companies. While Pagero tracks transaction volume, less emphasis is placed on end-consumer data, such as the number of unique individuals served on an annual basis.

At the industry level, data completion and availability also vary, often requiring additional research to inform underlying assumptions. For Pagero, we found a lack of quality, publicly available data on the global e-invoicing market, particularly for countries in the Global South. As a result, we estimated key inputs like regional market size, VAT tax recovery potential, and future e-invoicing market growth by leveraging what data was available publicly and making conservative assumptions.

In contrast to the e-invoicing market for Pagero, we found a range of high-quality, public sources with seafood industry data relevant for Milarex (e.g., seafood consumption, seafood as a proportion of annual food consumption by country). As IWA becomes a more standardized approach, our hope is there will be greater agreement within industries regarding the data that should be tracked, collected, and reported, particularly relating to end-consumers.

Quality of monetization assumptions

While there is an emerging consensus around the need for monetizing environmental impacts (e.g., cost of carbon), monetizing social impacts is less straightforward. To monetize the impact of seafood on consumers, for example, you might link nutrient consumption to a set of health benefits – but how do you capture the economic value of that health benefit? In the case of Milarex, we used academic literature to calculate the treatment cost avoided due to seafood consumption; however, there is often a difference between the underlying populations and geographies of a study and the company impacts to which we apply them.

Pagero also confronted limitations on this front – while tax recovery from increased VAT compliance is a key impact for Pagero, it is difficult to directly link increased e-invoicing activity with a reduction in the VAT gap for all geographies. While our approach was to apply rates of VAT gap reduction due to e-invoicing adoption from academic sources, the few sources available were specific to a small set of countries. Together, these examples illustrate a need for industries to work towards sourcing and developing studies that validate key company impacts on consumers, as well as establishing universal monetization coefficients for their products and services.

Sector-wide collaboration and knowledge sharing is critical to scaling impact accounting

Concerning adoption levels of IWA, only a few market actors are engaged to date. To achieve its potential, IWA requires further methodological development and iterative pressure-testing and piloting to “get it right,” which IFVI is currently working on in partnership with the Value Balancing Alliance. For the business sector to optimize and benefit from IWA in the near term, asset managers and portfolio companies must coordinate to build up resources and capabilities. In the long term, learnings from industry testing must be codified into methodologies that include standardized impact calculations, enhancing the comparability and decision-usefulness of IWA.

For companies in sectors lacking publicly available market data like Pagero, this might look like teaming up with peer companies to commission e-invoicing market data from sector experts or co-creating and iterating on impact monetization frameworks for shared business segments. Starting with a set of shared resources will promote conducting analysis with fidelity, encourage laggards to experiment with IWA, and push us collectively towards cross-company impact measurement.

For companies like Milarex, where quality market data is relatively available, but impacts are moderately understood, there is an opportunity for peer companies to engage each other and advance their perspective on the most material impacts of their products on consumers and how to accurately capture those impacts. For example, companies producing similar foods may engage each other to align on the key health benefits from consuming those foods. These companies could also explore whether there are impacts beyond nutritional benefits – and the economic benefits of improved nutrition – that are material to report to investors and other stakeholders.

As more practitioners commit to and invest in the IWA methodology, there will continue to be improvements in data availability, measurement standards, industry-specific frameworks, and impact monetization infrastructure.

The next few years

Summa is committed to continuing to work with IFVI to build impact-weighted accounting capabilities because we believe in the need to evolve the economy’s intuition around creating value for society. We also believe that expectations around the role that companies play (or do not play) in protecting the environment and prioritizing people will only continue to increase moving forward. As we move to institutionalize IWA and impact accounting more broadly, we encourage other asset managers to collaborate and share their experiences with impact monetization.

Summa welcomes collaboration and thought partnership – please reach out if you’d like to connect!

Acknowledgments: Thank you to Zoe Bulger for lending her guidance and mentorship throughout the analysis and during the completion of this article, and to Ryan Daulton for his expertise and guidance on the impact-weighted accounting methodology.

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  4. Investing in a circular and waste-free Europe

Investing in a circular and waste-free Europe

Stockholm, April 19th – A report published today by Summa Equity (“Summa”) identifies EUR 230bn in investment needs by 2040 for new physical assets and infrastructure alone to enable the transition to a circular European economy. Also, the report highlights several opportunities across multiple sectors for the EU circular economy to reach its true potential.

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The report, “Investing in a circular and waste-free Europe,” is a sector-defining body of work which closely examines the current state of play in Europe. It highlights areas in which the EU is doing poorly, such as material production and disposal, which generates 850 Mt of CO2e per year, equivalent to 22% of total EU GHG emissions. The report, launched in conjunction with the Harvard Business School event “A trillion-dollar opportunity hiding in plain sight – the Circular Revolution”, sets a clear path toward future prosperity.

One of the most important opportunities identified by the analysis is the need for a new asset base for the circular economy: equipment, processing plants, and supporting infrastructure. The analysis estimates the cumulative investment needed in physical assets to be EUR 230bn by 2040. Such investments can also generate attractive returns, the analysis finds, with the valuation of circular markets potentially exceeding EUR 1.5tn by 2040.

Progress is being made in several regards: the EU has set targets for waste reduction and recycling in key sectors, carbon prices are rising rapidly, and companies are embracing circularity as part of their climate and sustainability strategies. Central to the Summa thesis is the need for companies to lead change and be a force for good, by implementing ESG policies and future-proofing their operations, decarbonizing at speed, and proposing solutions to systemic issues.

The report finds that “an enormous recasting of European markets for materials, waste and physical products” is due by 2030. In turn, circular business models could generate about EUR 265bn revenue in 2030, representing 15% of the physical consumer goods market, and EUR 450bn by 2040. Add savings from materials efficiency, as well as a projected quadrupling of the recycling industry, and the total revenue generated by Europe’s circular economy could be EUR 820bn by 2040. Greenhouse gas emissions could be cut by 650 Mt CO2e – equivalent to the combined emissions of France and Spain, or 55% of the total emissions from the material system in a 2040 business-as-usual scenario.

Summa Equity Founder and Managing Partner Reynir Indahl said:

“Our research and work explore the Theory of Change for achieving a waste-free and circular economy in Europe, which represents an enormous opportunity – a chance to recast the EU economy to sharply reduce waste, reduce emissions, become more self-sufficient, and maximize the value of the materials we use. With this, we seek to inspire, provoke thought, and stimulate discussion on how to drive the circular transition. Together, we can now shape a future where waste is not a problem, but a valuable resource for a prosperous, sustainable, and resilient Europe.”

Summa Equity Partner Bertrand Camus said:

“The circular economy provides Europe with a remarkable opportunity – the chance to build a revitalized, future-proof, economy, which will enhance the continent’s ability to reduce emissions and usher in a new era of industrial prosperity. As evidenced by the research, investment is required, but such outlays come with significant upsides and opportunity. Time is of the essence, and we must move fast.”

*** END ***

About Summa Equity

Summa invests in companies that are solving global challenges and creating positive Environmental, Social, and Governance (ESG) outcomes for society.

Summa’s purpose is to co-create win-win for investors, portfolio companies, and society through aligning its vision and outcomes to the Sustainable Development Goals, ensuring a net-positive impact against ESG challenges, and the potential for long-term, sustainable outperformance.

Investments are focused on industries and companies that have tailwind from megatrends within three sustainability themes: Resource Efficiency, Changing Demographics, and Tech-Enabled Transformation. Across these themes, Summa’s portfolio companies are supporting a world in transition and showing that business can be part of the solution. Summa Equity has c. EUR 4 billion (c. SEK 40 billion) assets under management.

summaequity.com

For interviews or more information, please contact:

Hannah Gunvor Jacobsen, Partner and Head of IR at Summa Equity
+47 936 41 960 | hannah.jacobsen@summaequity.com

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Securing the backbone of the digital economy: strengthening cybersecurity for SMEs

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