Many years ago, my journey into sustainability began at Sarona Asset Management, a private equity fund investing in mid-market companies in partnership with local private equity firms across the Global Growth Markets—a true pioneer in impact investing. It was there that I learned two key lessons that continue to shape my work today:

1. Sustainability is NOT a compliance exercise. It’s a set of beliefs and actions embedded in everything a company and its people do.
2. Strong financial returns and lasting societal impact can go hand in hand. They are mutually reinforcing, creating a powerful synergy when done right.

What I also learned throughout my professional journey is that for many companies, the idea of attracting sustainability-minded investors can seem daunting.

Why Does Attracting Sustainability-Minded Investors Seem So Challenging?

There’s a common misconception that only companies with an ethos like Patagonia—deeply rooted in environmental and social activism—can appeal to sustainability-minded investors.

But here’s the reality: sustainability-minded investors aren’t looking for perfection; they’re looking for clarity, focus, and progress toward sustainability objectives. This means you don’t need to overhaul your entire business model to be attractive to these investors. What matters is demonstrating a clear commitment to ESG principles, backed by measurable, time-bound actions, targets, and transparency.

What Are Sustainability-Minded Investors Really Looking For?

To uncover what truly matters to sustainability-minded investors, I spoke with my former colleague and sustainability expert Narina Mnatsakanian, recognized as one of the Top 50 Women in Sustainable Finance in the Netherlands. With 18+ years of experience working with impact-focused institutions, Narina offers unparalleled insights:

“Sustainability-minded investors are pragmatic,” Narina explains. “They know not every company starts as a shining example of sustainability. What they want to see is a company that understands its material ESG risks and opportunities, sets clear goals, and demonstrates a credible plan to improve with short- and medium-term targets.”

She adds, “It’s not about being perfect—it’s about being authentic and striving for continual improvement. Investors are drawn to companies that combine solid financial performance with a vision for long-term value creation, embedding sustainability into their strategy, products, services, and operations—even if they’re just starting their journey.”

How Does A Step-By-Step Guide To Attracting Sustainability-Minded Investors Look Like?

Step 1: Establish Focus by Identifying What Matters Most

The journey begins with understanding your unique ESG risks and opportunities, and choosing the right framework to help align your ESG priorities with stakeholder expectations and regulatory requirements (e.g. CSRD has become a must for businesses operating in the EU, wherease GRI offers broader, global persepctive). 

Then a double materiality assessment allows you to identify two key dimensions:

• Financial Materiality: ESG factors directly impacting profitability and shareholder value.
• Impact Materiality: How your operations and investments affect the environment and society.

Step 2: Show Clarity by Defining Your Ambition Level

Sustainability-minded investors don’t expect you to lead on every ESG topic. They want clarity about your priorities and ambitions. Start by asking:

• Are we aiming for compliance, or do we aspire to be an industry leader?
• What do our ESG ratings (e.g. Sustainalytics, MSCI) reveal about gaps to address?

Investors prioritize businesses with ambitious but realistic goals. Examples include:

• Environmental: A clear climate transition plan to achieve net-zero by 2050, with short-term targets (e.g. 2025–2030).
• Social: Actions to improve diversity, ensure equitable pay, and increase transparency around pay gaps.
• Governance: Building a diverse, independent board with ESG expertise.

Step 3: Ensure Progress by Building an Actionable ESG Framework

Investors value tangible actions over grand gestures. Here’s how to build a credible ESG framework:

1. Identify Focus Areas: Select ESG priorities aligned with your materiality assessment and business strategy.
2. Create an Actionable Roadmap: Develop measurable actions, goals and KPIs. Examples:
   • Facilitate the transition to a circular business model by investing in process optimization and product innovation focused on reuse, recycling, and resource efficiency, targeting a 20% reduction in operational waste within the first three years.
   • Eliminate significant pay gaps (e.g., gender) within five years by conducting annual pay audits and training managers on equitable hiring practices.
   • Improve ESG risk management to cover 100% of suppliers by integrating ESG criteria into procurement processes.
3. Embed Governance: Assign clear accountability, such as establishing a board-level ESG committee, and ownership throughout the organisation.
4. Engage Stakeholders: Involve employees, customers, and communities in co-creating your ESG strategy.

Step 4: Measure and Communicate Impact

Transparency is key. Investors need evidence of how your ESG actions create real-world impact.

• Structured Reporting: Use frameworks like CSRD, EU Taxonomy, GRI, or ISSB to provide credible ESG data.
• Impact Storytelling: Showcase case studies highlighting how your initiatives deliver measurable benefits, e.g. reducing emissions or improving community health.
• Regular Updates: Share progress reports blending financial and impact metrics.

Debunking the Myth: You Don’t Need to Be Patagonia

To sum it up: sustainability-minded investors don’t expect perfection. They value companies with:

1. Vision: A top-down commitment to sustainability.
2. Awareness: Clear understanding of ESG risks and opportunities.
3. Action: Time-bound steps to address key issues.
4. Authenticity: Alignment of ESG strategy with business realities and purpose.

Whether you’re a financial institution integrating ESG into portfolio decisions, a manufacturer transitioning to greener processes, or a retailer addressing supply chain sustainability—what matters most is your willingness to act and improve.

Author: Darina Elencheva, Founder & Lead Strategist at the sustainable link & co.