University of Helsinki: Sustashift’s Innovative Sustainability Reporting Tools Result in Tens of Thousands of Euros in Savings
Although many companies produce sustainability or responsibility reports, they are not consistent or comparable with each other. From the beginning of this year, the EU’s Corporate Sustainability Reporting Directive (CSRD) has required large listed companies to report on their sustainability performance in a precisely defined format and with specific content.
The reporting requirement will expand next year to encompass large unlisted companies. One of those to be affected is Sustashift’s client Planmeca, which has begun to prepare for the new obligations together with Sustashift. Later, the requirement will be extended to smaller companies too.
The reporting requirement is based on an almost 300-page complex and ambiguous document. As some companies are unable to explore the reporting standards in sufficient detail, they will need advice and tools. Sustashift is a recently established startup helping to address this challenge.
“We developed a software solution with templates guiding the user to respond to all the questions required by the standards. Reports must also be marked up digitally to enable data comparison in a machine-readable format. This increases the complexity of reporting,” explains Sustashift’s founder Verneri Laakkonen.
Sustashift resolved the issue by determining the location of each digital mark-up in the model templates. What makes the company’s solution unique is that it adds the mark-ups automatically in a matter of seconds.
“As individual mark-ups may number over 20,000, adding them manually is a huge task, but that’s what has been done so far. Automation saves companies hundreds of hours of work and tens of thousands of euros each year,” notes Laakkonen.
Definition of materiality at the core of reporting
The planning of responsibility reporting begins with an impact assessment. A new way of identifying key sustainability factors involves the double materiality perspective. This means that companies must assess the material impacts of their operations on people and the environment. In addition, they must assess the impacts of climate change and other sustainability factors on their business operations.
“Although reporting as such will not change the world, information is needed to make operations more sustainable. Reporting enables comparison between companies, which creates pressure on them. Comparability will make it possible to invest in or loan funding to companies that are managing responsibility issues successfully,” says Laakkonen.
Sustashift was established in spring 2023. The founder, Verneri Laakkonen, LLM, trained some of Finland’s biggest companies in sustainability reporting requirements when working at Borenius Attorneys Ltd. He has also conducted materiality assessments and produced content for the sustainability reports of large companies.
“Few legal experts are familiar with the requirements of the new standards, but we now offer this service,” he explains.
At present, the company focuses on the Finnish market, but client needs and problems are similar elsewhere in the world too.
The University’s investment gave the courage to develop operations
The University of Helsinki Funds invested €50,000 in Sustashift as part of the student entrepreneurship programme HELSEED. Laakkonen learned of this funding opportunity by chance.
“While working for a few days in the Think Company facilities at Think Corner, I obtained information about the HELSEED funding and advice on other funding channels, such as Business Finland’s innovation vouchers. I submitted my business plan for assessment to the University of Helsinki Funds team and, after negotiations, received a positive funding decision in early 2024.”
Laakkonen says a small company has access to few funding routes. The €50,000 investment was important in encouraging him to develop the operations on a larger scale.
“I understood that not all development work needs to be paid for with income financing, as external funding can boost growth. We began to develop our software with the funding, and I feel confident it will pay itself back later this year.”
Laakkonen praises the University for supporting its students’ business activity, but would like to see it offer more entrepreneurship studies.
“University education provides a great deal of specialist expertise, which is needed in the job market, but the Faculty of Law, for example, offered no entrepreneurship courses. More such studies should be available so that all those interested in entrepreneurship would gain basic skills and see it as a genuine career option,” he states.