With early-stage funding peaking at $49 billion in 2021, it’s never been more important for startups to hone their ESG strategy,
leading the curve, adhering to ever-evolving best practices, and creating a brand positioning that slots seamlessly into your investor’s portfolio. Reacting to demand, with 83% of consumers believing that companies should be shaping ESG best practices, ESG-conscious startups are best positioned to meet VC firms’ stringent criteria, nurturing long-term growth.
ENVIRONMENTAL CONCERNS
From introducing environmentally conscious supply chains, investing in green offices, and partnering with eco-friendly initiatives, to avoiding contributing to our ever-expanding landfills, businesses are playing a pivotal role in the mass drive towards sustainability.
It’s no secret that startups are spearheading change across the board, calling upon cutting-edge technologies and a laser focus on innovation. But with 60% of global consumers listing ‘sustainability’ as an important criterion before making a purchase, startups are continually at the forefront of the commercial fight to thwart climate change, pollution, and resource depletion.
From zero-waste apps, such as Too Good to Go and Refill, to next-generation firms solely using renewable materials, there is an undeniable trend of startups using their innovative flair for the global good.
SOCIAL ISSUES
Giving investors the peace of mind that their capital will contribute towards the greater good, the ‘social’ ESG pillar is driving a new age of startups. Centred on workforce equality, fair wages, diversity, and reasonable working conditions, 41% of millennial investors place an emphasis on corporate social responsibility compared to 16% of baby boomers, offering a clear insight into the future of consumer habits.
From spearheading the movement towards transparent wages to combat the gender pay gap, introducing remote working policies, and combatting discrimination from the ground up, to becoming involved in community initiatives, 42% of a company’s reputation is based on its corporate social responsibility efforts.
GOVERNANCE
While sustainability has dominated the discourse surrounding startups, corporate governance is a notion at the heart of hyper-growth firms. Relating to a company’s rules, practices, and norms, corporate governance represents an integral cog in the startup wheel, avoiding financial loss, compliance breaches, and privacy concerns.
At its core, corporate governance is built upon a foundation of experienced, diverse boards. From Sports Direct’s zero-hour contract scandal and WeWork’s series of high-profile mishaps to the public outcry over Amazon’s low-tax history, startups are hyperaware of the impact a lack of governance can have. With well-managed risks, water-tight data policies, and stringent decision-making processes – free of conflicts of interest – public trust comes hand-in-hand.