Time to re-think your sustainability approach in Investment Promotion

Investment promotion agencies (IPAs) play a critical role in economic growth, but sustainability has become a buzzword often disconnected from real impact. Many climate-driven policies have created an avalanche of compliance burdens without fostering real innovation. Investors increasingly recognize the flaws in ESG frameworks and in adding new regulations like Europe's CSRD (Corporate Sustainability Regulation Directive), where excessive reporting and bureaucratic requirements hinder business rather than support meaningful environmental action. Northvolt, hailed as a flagship green battery manufacturer in Europe, exemplifies the problem. The company secured billions in government funding under the banner of sustainability but has struggled with delays, financial instability, and operational hurdles. It serves as a warning: state-backed sustainability projects often fail when economic fundamentals take a backseat to political narratives.

IPAs must rethink their approach—focusing on measurable, commercially viable sustainability rather than ideological commitments.

Why Use Design Thinking?

Design thinking is a problem-solving methodology. Originally developed in the design industry, design thinking has proven effective across many fields for addressing complex issues. For IPAs, it’s a hands-on, collaborative method that brings together diverse perspectives to solve problems in a structured way. By focusing on understanding investor needs, generating ideas, and testing solutions, design thinking is well-suited for tackling sustainability in investment promotion.  

Journey Mapping for Environmental Impact

Journey mapping, a core design thinking tool, can help IPAs analyze an investment project's lifecycle and pinpoint areas for genuine improvements. It can be a practical tool for sustainability. This exercise can uncover opportunities like optimizing energy efficiency, reducing waste in supply chains, or ensuring sustainable logistics. Here’s how to apply it: map the key stages of an investor’s project—from site selection to operations—identify environmental touchpoints such as energy use and waste, and collaborate with stakeholders to co-create solutions. Prototyping ideas helps visualize and refine these strategies.

Sustainability trends in 2025 such as the circular economy, supply chain sustainability, localized renewable energy, and nature-based climate solutions—offer avenues where design thinking can drive impact. Journey mapping can reveal ways how companies can upcycle with local partners, helping investors align with circular economy goals. Nature-based solutions, such as urban greening or wetland restoration, can address climate resilience while generating economic opportunities for local stakeholders.

Think like an Investor

IPAs need to focus on real business cases that integrate sustainability meaningfully. By taking on the perspective of the investor and what business functions would work best in your location, IPAs can gain credibility with investors.  One such example is the concept of a "Sustainability Center of Excellence". A company aiming to centralize its sustainability initiatives - not as a branding exercise, but as a hub for research, industry partnerships, and workforce training in sustainable production methods - worked with local stakeholders to identify the ideal location. By offering robust renewable energy infrastructure, strong academic partnerships for research and innovation, and a supportive policy framework, the region positioned itself as the perfect home for this initiative. This not only attracted investment but also created a hub for knowledge-sharing and regional impact.

Start making a Difference

IPAs need to move beyond politically motivated climate narratives and adopt a pragmatic, business-first approach to sustainability. Design thinking offers a structured way to develop real, actionable solutions. It’s not just a tool for innovation; it’s a way to turn ambitious goals into practical, impactful strategies and achievable results. By incorporating exercises like journey mapping and addressing emerging trends, IPAs can uncover actionable solutions that benefit investors, communities, and the environment.

The Location Lab

Interested in learning more? At The Location Lab, we specialize in running design thinking workshops tailored for IPAs. Get in touch to start solving sustainability challenges with clarity and purpose.