Our sustainability strategy: streamlining the rental process

There are some very exciting sustainability initiatives in Swedish PropTech. Companies like Myrspoven, Sally R and Bintel all have the potential to make the real estate industry more sustainable. We also want to contribute, and although our solution is not as clearly linked to sustainability as those of the companies listed above, our insurance can have a large impact on small business owners and the rental market at large. The deposit and bank guarantee mean capital commitment for the tenant and, indeed, have more negative impacts than one might first imagine.

Negative impact #1 - Higher threshold for the rental market

Capital lock-in, except for the most liquid companies, is unnecessary or even worse, unsustainable, for the business model. Virtually all small companies are required to pay a deposit the first time they rent premises which slows down their growth rate, as the availability of premises does not occur when the need arises but only when the tenant was able to save up for a deposit.

Negative impact #2 - Lower use of financial resources

Most companies can find a way to generate a higher return on their assets, even if it means saving excess cash in an interest-bearing account. But the deposit and the bank guarantee mean that the capital is not used, at all. It is a huge waste of resources and an outdated method in today's sophisticated capital market.

Negative impact #3 - Increased rental vacancies in the rental market

Since tied-up capital limits the choice of tenants, only those who can and those who want to deposit money, landlords also suffer from the deposit. Reduced choice results in increased vacancy rates as it will, on average, take longer for each premise to be rented.

Our approach

Based on these three problems, we have identified three individual aspects of our solution that lead to increased sustainability in the rental market. We have defined these in line with the Sustainable Development Goals (SDGs) to facilitate communication and continuous improvement. By improving the rental process our solution contributes to SDGs' Targets 8.1, 8.2 and 11.6 of the 2030 Agenda. Read more about how we're making a difference below.

Target 8.1 - Sustainable economic growth

We offer a more convenient and affordable alternative to the rental deposit. Our solution lowers the threshold to the rental market for smaller companies and startups that do not have the financial muscle to pay a deposit and would not otherwise have the opportunity to rent.

We promote entrepreneurship and economic growth

Target 8.2 - Promote economic productivity through diversification, technological innovation and upgrading

Billions of dollars are tied up in deposits and bank guarantees, basically collecting dust. By giving landlords the same protection in a more capital-efficient way, we enable the money to do more good, in terms of increased investment and innovation.

We allocate capital more efficiently

Target 11.6 - Reduce the environmental impact of cities

By lowering the threshold for the rental market, we increase tenant demand. Higher demand leads to lower rental vacancies and thus our solution contributes to more sustainable cities, where all resources are efficiently used

We increase the efficiency of the rental market

Jun 27, 2022