Evolving Investor Expectations. Transparency, Ethics, and Measurable Impact_ZL.pdf

This is not a one-dimensional trend. Some investors remain skeptical of headline ESG frameworks, and in some markets support for shareholder ESG proposals has fallen sharply. That tension means companies must be both precise and honest about what they claim, how they measure it, and why it matters for enterprise value.
Eric Hannelius, CEO of Pepper Pay, frames these shifts with a practitioner’s bluntness: transparency and ethics are business mechanics that reduce friction, not philanthropic extras. Eric Hannelius argues that fintech firms face a unique test because the products touch people’s money and data. “Investors want evidence that a business respects the people it serves by securing data, by preventing harm in underwriting, and by designing services that expand access responsibly. Transparency is the bridge between intention and trust.”

1. Evolving Investor Expectations: Transparency, Ethics, and
Measurable Impact

Investor demands are changing in ways that matter to how companies build strategy,
run operations, and report performance. In 2025, capital allocators are pressing for
clearer evidence that corporate actions align with long-term value creation and social
outcomes. That pressure carries into boardrooms, product roadmaps, and audit trails:
transparency has become a functional requirement, ethics a board-level risk
assessment, and measurable impact a condition of access to certain pools of capital.
This is not a one-dimensional trend. Some investors remain skeptical of headline ESG
frameworks, and in some markets support for shareholder ESG proposals has fallen
sharply. That tension means companies must be both precise and honest about what
they claim, how they measure it, and why it matters for enterprise value.
Eric Hannelius, CEO of Pepper Pay, frames these shifts with a practitioner’s bluntness:
transparency and ethics are business mechanics that reduce friction, not philanthropic
extras. Eric Hannelius argues that fintech firms face a unique test because the products
touch people’s money and data. “Investors want evidence that a business respects the
people it serves by securing data, by preventing harm in underwriting, and by designing
services that expand access responsibly. Transparency is the bridge between intention
and trust.”
From promises to provable outcomes.
Investor conversations used to accept aspirational language and glossy sustainability
pages. Those days are ending. Asset managers and impact funds now demand process
maps, data lineage, and auditable outcomes that link social and environmental
initiatives to financial performance. They want to understand causality: how an

2. intervention produced a social outcome, which operational levers produced the fiscal
outcome, and which controls ensure the effect endures. Reporting that reads like
marketing will fail diligence; reporting that reads like business intelligence will win
allocation.
That shift has practical consequences. Companies are being asked to provide sector-
specific metrics, standardized impact indicators, and governance evidence, who owns
the program, how results are measured, and how adjustments happen when outcomes
diverge from targets. Global working groups and market bodies have produced
harmonized guidance for social bond and impact reporting to reduce ambiguity for
investors and issuers alike. That guidance is rapidly becoming part of deal paperwork.
The messy middle: ratings, comparability, and credibility.
A key headache for investors is inconsistent rating methodologies. Different ESG
vendors can produce divergent scores for the same company because they weight
factors and define indicators in different ways. That inconsistency erodes confidence
and raises transaction friction: investors spend time reconciling scores instead of
analyzing strategy. Research and regulatory bodies are calling for greater transparency
in how rating agencies operate and how data is sourced and cleaned; in turn, many
institutional investors are demanding that companies publish raw indicators and
methodology notes, not only summary scores.
The practical implication is simple: companies that offer transparent measurement
protocols and publish data lineage shorten investor due diligence and reduce the scope
for skepticism. Firms that bury assumptions or offer opaque vendor-only scores will
encounter further questions and slower decisions.
Ethics as operational design.
Ethics has migrated from a compliance checkbox to a design question embedded into
product development, pricing, and data strategy. Investors now evaluate whether a
company has thought through the ethical implications of its core revenue drivers user
targeting, algorithmic personalization, lending models, employee surveillance, supply
chain procurement and whether there are guardrails that prevent harm while allowing
innovation. Boards are being asked for risk registers that connect ethical exposures to
KPIs and remediation playbooks.
For fintech firms, the questions are specific and immediate: how are consumer
protections coded into the UX? How does the model handle bias in underwriting? Are
there escalation paths when automation produces unfair outcomes? Demonstrating that
ethics is operationalized via audits, human review points, red-team testing, and public
policies creates a trust advantage. Investors treat those practices as value protection,
not abstract virtue signaling.
Investor expectations have matured. They demand that companies present
transparency as a functioning capability, ethics as an operational design constraint, and
impact as evidence that can be tested. The companies that succeed will be those that
treat these demands as core business architecture rather than optional adornment,
because in markets that prize durability, clarity is capital.