Investors seem to find certain aspects of social sustainability important; however, our data indicates that social sustainability takes a backseat to environmental sustainability in most cases. The most important social areas for investors were health, both physical and mental, followed by diversity. To a lesser extent we also find areas such as privacy, education, and economic inequality, as seen in Figure 8. These findings support A) the development of viewing mental health as an increasingly important investment area, as costs within this disease area have grown over the past decade<span class="superscript" >8</span>; and B) the importance of creating a truly diverse and non-discriminatory business sector, as e.g the Danish tech-sector still lags behind with only 28% of the workforce being women<span class="superscript" >9</span>.
For environmental sustainability, we find that climate action is the most important area for investors, followed closely by clean energy and resource efficiency. Agriculture, biodiversity and water and sanitation were rated as less important, as indicated by Figure 9. These tendencies are in line with the current policy climate and the ambitions of realising a 1,5°C scenario by severely reducing GHG emissions through reduction activities, climate partnerships such as DK2020, and investing in new technologies, exemplified by the establishment of initiatives like the Danish Green Investment Fund.
Looking at the three top-rated areas for social and environmental sustainability, we find that the top three environmental areas have a higher overall representation within the category of ‘very important’ than the top three social sustainability areas.
This indicates that environmentally-oriented ventures could be favoured over startups that target social sustainability as their main addressable problem.
This presents a problem of possible homogenization of verticals, which could create inflationary pressures on the valuations of environmentally oriented startups, as well as lead to underinvestment in startups that target social problems. Taken together, these factors could compromise the holistic approach to sustainability provided by the interconnection of the SDGs.
However, this is not to say that social sustainability is underrepresented in all matters. In fact, if we combine the segments of very important and important, health has a higher aggregate score (74%) than climate action (60%), showcasing a more balanced distribution. Figure 10 shows the complete relationship across social and environmental sustainability areas for the combined segments of “very important” and “important.”