International digital business is moving toward carbon neutrality faster than governments are. Tech giants AWS, Google and Microsoft have pledged to reach net zero as early as 2030 to 2040, ten to fifteen years ahead of the European Union's 2050 target. Several other global companies are keeping the same pace, including the gambling software giant Playtech.
That puts Estonian exporters in front of a choice: adapt to the new reality and win, or be left out of the competition.
An increasingly important criterion in financing decisions
"To my mind, for banks this is above all a question of competition and responsibility. As a company, applying ESG principles either gives you a competitive edge, or you risk falling behind those offering more sustainable solutions," says Mihkel Tamm, head of ESG for corporate banking at Swedbank. According to him, more and more clients are looking for banks that follow sustainability principles.
According to Tamm, sustainability means fair wage policy, responsible use of natural resources, building homes resilient to climate change, and thousands of other topics that together create an environment where economic growth and sustainability go hand in hand.
Swedbank sees ESG as a clear business amplifier:
- Market access. "Following ESG principles makes it easier to enter markets where sustainability is a priority, or where stricter sustainability regulations are in place," notes Tamm.
- Cost of capital. Environmentally conscious investors prefer banks with a strong ESG profile.
- Risk management. "Integrating ESG principles helps identify and manage risks linked to environmental issues, such as climate change."
Tamm believes that within 10 to 15 years, sustainability will become a very important criterion in financing decisions. He uses a fitting comparison with the Stone Age: "The Stone Age didn't end because stone ran out. No, people developed and made smarter decisions. Today too, we don't have to burn natural gas and oil down to the last molecule and drop. Smarter, cleaner solutions are on the table."
What do you risk by missing the train?
Even in the complex world of gambling software, ESG has become key to success. "We believe that growing our business responsibly and sustainably is essential to being a valuable long-term partner to everyone we work with," stresses Ivo Lasn, director of Playtech Estonia.
Playtech's 2025 plan focuses on four pillars: a safer gaming experience, tackling climate change, a fair and inclusive workplace culture, and cooperation on solving societal problems.
At the centre of its safer-gambling solutions is BetBuddy, an AI-based tool that uses data analysis and machine learning to identify play patterns that may indicate risky behaviour. The technology is already in use by 23 brands in 14 countries.
On climate, Playtech has clear targets: cutting emissions by 50.4 percent by 2032 (compared with 2022 levels) and reaching net zero by 2040. Lasn also points out the risks of missing the train:
- shareholder pressure: investors sometimes push listed companies to take responsibility on various sustainability issues, especially around climate change, human rights or the use of artificial intelligence;
- fines or regulatory intervention: in some countries or sectors, ignoring laws on environmental, social or governance matters can bring financial penalties or other consequences;
- loss of operating licence: in regulated industries such as gambling, where Playtech also operates, a company can lose the right to continue operating;
- loss of trust and reputation: if a company fails to act or take responsibility, it can damage its reputation and the trust placed in it by employees, investors, clients and partners alike.
"There's no way around it"
For data centers, following ESG principles is not a declaration, it is a purely practical matter. "A data center is, by its nature, the foundation for everything. Whatever comes from the global market via end clients ends up on our desk one way or another. There's no way around it," says Martin Rungi, enterprise segment lead at Greenergy Data Centers, located just outside Tallinn.
While domestically the focus on sustainability may have faded somewhat from the agenda, largely due to an uncertain economy and the geopolitical situation, it is not something you can easily sidestep in international business. "If you want to start negotiations with a large international client, you need to show the whole package proving you're doing these things. Otherwise, they simply won't talk to you," Rungi confirms.
Where price used to be decisive, the picture is now much broader. "If price used to be 100 percent of the evaluation criteria, today it's more like 60 to 70 percent. The rest is value-based elements, and those decide whether you get onto the market at all. If you don't follow ESG principles, you're a bottom-tier bidder," says Rungi.
For Greenergy, sustainability is already part of everyday business, since data centers in the EU are subject to a specific reporting obligation. From 500 kW upward, data centers must report on their energy efficiency.
What can the state do?
All the speakers see a key role for the state. Tamm suggests starting with simple steps: pre-filling greenhouse gas data in annual reports, publishing methodologies for building energy efficiency, and aligning messaging across ministries. "By simplifying implementation, companies can focus on what actually matters: creating value and reaching shared goals."
Lasn adds that cross-sector cooperation is unavoidable: "No single organisation can solve major societal or environmental problems on its own." Playtech works with a range of partners, from the University of Nevada to Estonian foundations, to reduce gambling-related harm and promote STEM education.
Rungi also highlights the need for a clear direction and firm policy choices from the state. "If we signal to businesses that we're rethinking things today and again tomorrow, nobody bothers to engage, because every short-term change is an expensive investment. But if you say the target for the next 20 years is set, people actually start acting on it," he says.
Rungi describes how older data centers in Central Europe are undergoing extensive modernisation: "Solar panels are being installed, and other steps are being taken to bring their footprint down significantly. Now that the regulations are a reality, action is moving forward at real pace," he confirms.
What does this mean for Estonian businesses?
- Exporting requires ESG. Scandinavian markets are strictly selective; without credible climate targets, the doors stay closed, Tamm confirms.
- Capital gets more expensive for laggards. Banks and investors increasingly weigh ESG ratings.
- A chance to stand out. Early movers win market share and talent, especially people looking for a values-driven employer.
In short, ESG is no longer a "soft topic", it is a hard economic fact. As Tamm puts it: "ESG means wanting to shape a future where economic growth and sustainability go hand in hand. And that's exactly the kind of direction a bank is happy to finance."
Rungi adds: "Like it or not, when both the client and the regulator expect sustainability, you don't have many options left for growing your business."