Sustainability Unicorns: The Future of Investments

Unicornios de sustentabilidad el futuro de las inversiones
Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors

Regarding the environmental situation, globally, we are racing against the clock. To combat the triple planetary crisis (climate change, biodiversity loss, and pollution), it is imperative to prioritize solutions that generate a circular economy, states the Economic Commission for Latin America and the Caribbean (ECLAC) in a press release. 

Citizen awareness of environmental and social impacts is growing, making it a central issue in global discussions. To contribute to positive change, individuals seek to engage with companies that demonstrate environmental towards the environment through consumption, investment, or interaction. 

The trend toward sustainable investing has accelerated, driven by the perception that sustainability is not only morally desirable, but also economically beneficial. According to First Insight. 62% of younger generations, such as millennials and Generation Z, prefer to invest in companies with sustainable practices., según cifras de according to figures from First insight 

One of the sought-after characteristics of these companies is their ability to face long-term challenges and take advantage of emerging opportunities, un the face of accelerating change. 

Why support sustainable companies?

Decarbonization is an issue that affects everyone, given the climate emergency the world is facing. Conversely, companies that do not seek to be sustainable will find it increasingly difficult to survive. 

Sustainable unicorns that promote green technologies are gaining popularity due to the positive impact they have on the economy. Sustainable companies consider not only profits in their business model but also their impact on society and the environment 

According to the study 'Do ESG Efforts Create Value?' published by Bain & Company, sustainable companies are more profitable than those without a sustainability plan. Do ESG Efforts Create Value?, publicado por Bain & Company. 

Mexico is one of the region's leading countries in sustainability investment, with 69% of Mexican companies participating in the sustainable transformation, according to the study 'Sustainability in the Agenda of Latin American Leadership' conducted by SAP. 

More and more companies are implementing strategies to support this case as interest in this area grows. This makes it possible to achieve the Sustainable Development Goals (SDGs) of the 2030 agenda becomes possible. 

It may also interest you: What is ESG? Everything you need to know to invest with impact

Advantages of Investing in sustainability

Investing in sustainability is a top priority for reforming the global financial system and achieving the SDGsaccording to the United Nations' 2023 World Sustainable Development Report.   

It offers benefits for both investors and society. The Greenpeace Organizationprovides information on some benefits:

  1. Profitability: companies with a sustainable approach are more profitable than their peers due to their exponential growth. 
  2. Innovation: they are also innovative and seek to maximize their resources. 
  3. Brand reputation: consumers prefer to support companies with a vision for social and environmental impact, which enhances their brand reputation. 
  4. Resource use: these companies leverage their resources through innovation, transforming, or dispensing with them rather than creating new ones. 
  5. Investing in the future: according to the United Nations report, less than 67% of the SDGs have been achieved. 
  6. Exponential growth: investing in sustainable companies can directly contribute to the regeneration of the planet and drive long-term growth. 

“The next 1,000 unicorns will not be search engines or social networking companies, but innovative, sustainable, and scalable:

“The next 1,000 unicorns will not be search engines or social networking companies, but innovative, sustainable, and scalable:startups that help the world decarbonize and make the energy transition affordable for all consumers.” 

— Larry Fink, Chairman of BlackRock, a U.S. multinational investment firm, in his latest annual letter published on CNBC.

It may also interest you: Tendencias sustentables, ¿en qué invertir en 2023?

Sustainability Unicorns in Latin America

These companies are known as sustainable unicorns because they not only strive for financial success, but also have a positive social l and environmental impact.

In Latin America, several emerging companies focus on sustainable solutions. 

These are the 5 most relevant sustainable unicorns in Latin America::  

  1. Mercado Libre: is an Argentine e-commerce company that aims to use 100% electric units in logistics. 
  2. OLX: is an online platform that buys and sells used goods, to extend the life of goods already manufactured and reduce pollution caused by the creation of new ones. 
  3. NotCo: is a Latin American food tech company that develops plant-based foods using patented artificial intelligence. 
  4. Nubank: is the first financial institution in Brazil and Mexico to neutralize its current and historical carbon emissions.
  5. Betterfly: the Chilean unicorn, that helps create healthy habits for customers and employees, has announced its commitment to achieving zero carbon neutrality by 2030 while investing in creating change in rural communities.

It may also interest you: Top of the most valuable unicorns in Latin America

How do you invest in sustainability unicorns?

Investing in unicorns represents an opportunity to invest in emerging companies that not only have significant potential for growth and financial success but are also committed to addressing social and environmental challenges. 

Alternatives that bring investors closer to these types of sustainable companies include: 

  • Direct investments: in some cases, individual investors may have the opportunity to make direct investments in sustainable startups.
  • Private equity funds: these are funds that seek to promote innovation and usually include companies with a focus on sustainability in their portfolio. There are even private equity funds specialized in this industry. 
  • Impact investment funds: Impact investment funds focus on companies that seek to generate a positive social or environmental impact, in addition to obtaining financial returns. These funds may invest in sustainability unicorns and other sustainable businesses.
  • Sustainability incubators and accelerators: these organizations work with early-stage startups and can provide access to promising projects.

What types of investors are interested in sustainable investing?

Investors interested in sustainable investments are diverse and not solely focused on financial returns, and include: 

  • individual investor
  • Angel investors
  • Investors with a moderate risk tolerance 
  • Institutional investors 
  • Impact investors 

These investor profiles are motivated by a variety of factors, ranging from the desire to make a social and environmental impact to the search for investment opportunities that address global challenges.

Outlook for sustainable business in 2024

2024 is seen as the year in which the private sector will embrace corporate sustainability. Where they will seek not only to respond to growing social and regulatory expectations but also position themselves as proactive leaders in the creation of a sustainable and ethical future.

This is the year for companies to take decisive action within their business model that allows them to make sustainability the protagonist of their decision-making.

According to the United Nations Global Compact, a voluntary initiative based on the commitment of the Chief Executive Officers (CEOs) of signatory companies, the key sustainability trends for 2024 include:

Profitability in an uncertain environment.

The environment is expected to remain complex, marked by uncertainty and potential issues such as energy crises, inflation, and accelerated technological change. In this context, companies must prioritize ethical practices that have a positive impact on the environment, society, and the economy, rather than focusing solely on profitability. 

Sustainability regulations

Regulations, including national laws on equal representation and the forthcoming human rights directive, will impose additional obligations on companies, such as sustainability reporting. 

Private capital transforming the financial system

The financial system is also transforming with the increasing involvement of private capital. This transformation is crucial to address challenges such as the energy transition, achieving the SDGs, adapting to climate change, and fighting inequality.

The private sector can make a significant contribution to these goals by accelerating sustainable finance initiatives. Investments committed to the SDGs are critical for a sustainable economic and environmental future.

Private investment is gaining momentum, leading to the emergence of new sustainable unicorns. These companies are not only profitable but also prioritize social and environmental responsibility. 

The growing focus on sustainability is reshaping the nature of investment and business. 

Private equity is aligned with innovation and technology, which are pillars in the creation of sustainable models. WORTEV CAPITAL is a Venture Capital fund that allows investors to support Mexican companies with high growth potential. The main objective is to create an ecosystem that positively impacts all stakeholders. 

About this

Why sustainability should not be missing in your investment portfolio? Here we tell you

Suscribe to our newsletter

Receive our latest news on your email.

This field is for validation purposes and should be left unchanged.

You might also be interested

México ofrece un entorno propicio para la inversión, por ello, un escenario que genere confianza es fundamental.
Sustainable investment trends for 2023 will focus on reducing the environmental impact of industries.
Impact investment is an alternative that optimize investors returns and promote social issues.
Why sustainability should not be missing in your investment portfolio? Here we tell you