21.10.2019

What is ‘green’ or ‘sustainable’ investment? EU might have the answer

It is no news that we are standing in front of, or perhaps already within, a climate crisis. Between 1980 and 2017, economic losses caused by weather and climate-related extremes in the EU amounted in more than EUR 450 billion. The climate emergency leaves us with no choice but a transit to a climate-neutral economy. However, if we are to reach the EU’s target to become a climate-neutral economy by 2050, capital flows need to be directed towards such transition, and only the EU would need an additional EUR 175–290 billion in private investment per year in order to achieve this.

The market has started to respond to this obvious gap. Sustainable investment as a field has grown rapidly during the past years and has transitioned from being a niche area to mainstream. Sustainable investing, i.e. investing along environmental, social and governance (ESG) criteria is one of the fastest-growing strategies in finance, and within ESG, it’s the “E” that has recieved the most attention. Market is facing a positive problem: investors’ demand for sustainable investments already surpasses offering.

However, an itching problem is starting to bother investors more and more, namely what counts as a ‘green’, or ‘sustainable’ investment? How do we really measure and compare green and sustainable investments? Although a number of initiatives on how to report sustainability measures have emerged, there is currently no single sustainability standard available. So who will take on the challenge to bring a common language to this field? It appears as if the EU has taken it on its shoulder to lead the way.

The EU has long expressed its wish to take the global lead in promoting sustainable finance. In March 2018, the EU showed that it is serious about taking the leading role in reforming the financial system to support the transition towards a sustainable economy, by adopting the ‘Action Plan on Financing Sustainable Growth’. One of Action Plan’s aims is to set down conditions and frameworks in order to develop a clear and unified classification system, or taxonomy, for environmentally sustainable economic activities.

While expectations on the taxonomy are undoubtedly high, the main question is whether the taxonomy actually will manage its task – to direct capital flows toward a more sustainable economy. Critical voices have pointed out that a taxonomy could counteraction and instead lead to a decrease in ambition level amongst those already passing the bar for what is considered ‘green’. Another concern brought forward is with sustainability and science rapidly developing, there is a risk that what we consider sustainable or green today, might not be so in the future, which could risk the practical usefulness of the taxonomy. Despite some concerns, the taxonomy would nonetheless contribute to a standardized, science-based classification system and provide some alleviation to the fare of greenwashing.

The goal is clear – we need to achieve a carbon-neutral economy – and so is the time line – now.

Latest references

We advised FIM in the establishment of the SIB fund focused on promoting child and youth welfare, including drafting documentation and addressing taxation questions. Social impact bonds (SIBs) are a good example of a new form of investment, which seeks to achieve social goals in addition to financial profit. The SIB fund established in this project is managed by FIM together with the Finnish Central Union for Child Welfare, the participating Finnish municipalities and the Finnish Innovation Fund Sitra. The activities of the fund are guided by representatives of the municipalities, the Central Union for Child Welfare and partner organisations providing child and youth services. The assets of the fund are used to finance projects promoting child and youth welfare. The fund’s profit is tied to the achievement of joint welfare goals, and the cost savings achieved are distributed between the municipalities and the fund’s investors. The fund is intended for professional investors.
Case published 12.2.2019
We advised Efima Oyj on the sale of its AI business to Better Care Technologies Oy. The transaction included Efima’s Moiva AI platform developed for the care sector, the related technology and brand, customer contracts, and the experts working in the business. Efima is a Finnish digital company that supports the sustainable growth of large and mid-sized companies by streamlining their business processes and by creating competitive advantage through the innovative use of artificial intelligence and data. The company has nearly 200 experts based in Helsinki and Tampere. 
Case published 21.9.2026
We advised Neoen Renewables Finland Oy, part of the French Neoen Group, in its sale of a data centre project to a consortium consisting of international data centre developers and operators. This marked Neoen’s first data centre development project in Finland. Founded in 2008, Neoen is one of the world’s leading independent renewable energy producers. The company operates in 15 countries. It develops, finances, builds, owns, and operates solar power plants, wind farms, and battery storage systems. Neoen Group is owned by global alternative asset manager Brookfield Corporation.
Case published 17.9.2026
We advised Jolt Capital and Tesi in connection with their investment in VEV, a leading provider of commercial fleet electrification solutions. The investment, led by Jolt Capital with Tesi as co-investor, will support VEV’s next phase of growth and expansion across Europe. As part of the transaction, VEV became an independent company following the acquisition of Vitol’s stake in the business. Founded by Vitol, VEV provides integrated fleet electrification solutions combining fleet strategy, charging infrastructure, energy supply and operational services. Through its VEV IQ platform, the company supports more than 6,000 commercial electric vehicles across Europe and has been deployed across more than 600 sites spanning the transport, logistics and waste sectors. Jolt Capital is a private equity firm focused on growth investments in European deeptech companies. Tesi is a Finnish state-owned investment company that promotes Finnish business and economic growth through investments. We advised Jolt Capital and Tesi on the equity financing and structuring aspects of the transaction. International law firm Goodwin advised the investors on the acquisition of VEV.
Case published 10.9.2026