Successful businesses balance creativity and innovation with sustainability.

Whether you’re a startup or an established big business, if you don’t have a strategic direction that is conscious of your impact across society and the environment, you will struggle to stay relevant regardless of your technological prowess.

Before we move on, it’s important to remember the three things that make up ‘ESG’: environment, social and governance.

To stay relevant, businesses must consider social and environmental impact, such as privacy, diversity and energy efficiency, as much as financial returns. We need to be conscious of how we do business, but also how our supply chain performs as well.

November brought consistent messaging from the 2021 United Nations Climate Change Conference (COP26) about action and ambition from global leaders. But, unfortunately, we’re well past the point where we can rely on governments and big businesses to make changes for us. Now, more than ever, it’s about making individual changes, as much as the early-stage startups building out their ESG credentials. 

We all need to be aggressive at meeting – and exceeding – our sustainability targets. The need to innovate will not disappear, but sustainable innovation is increasingly critical as society becomes more conscious of addressing climate change. It’s something everyone, at every level, needs to contribute to.

There’s a significant opportunity for early-stage businesses to build a market-leading position around helping others do better. If you’ve done the groundwork to be able to help a business (in any industry) become more sustainability conscious, you’ve got an advantage.

Here’s how startups can lead the way.


Be sustainable from day one

ESG policies can be embedded into a startup’s business model, principles and culture from the outset, rather than trying to retrofit policies later under the pressure of changing regulations and investor demands.

When you’re starting from scratch or are small enough to be agile, you have the opportunity to establish the right culture and mindset – unlike established businesses that may not have that focus ingrained into their company culture.

From an innovation point of view, it comes back to setting that groundwork for growth and development short-, mid- and long-term and thinking about your impact from an employee level, all the way up to the governance/ strategic level and across your supply chain.

Take action, faster

It’s not too late to get started. While many established companies are still worrying about the optics of how to start becoming more sustainable, the startup end of the ecosystem is already cracking on.

Startups, by nature, have to be agile and move as quickly as they can due to the constraint of their resources. If you’re building or developing innovation in this space and it does what it says on the tin, then integrating ESG policies and reporting early makes good business sense.


Show how you can help

Articulating how you as a startup can make a positive impact, will be very useful, especially when framing things with long-term data in mind.

Demonstrate how your innovative services can improve efficiencies and improve established processes as this will make a huge, positive, sustainable impact to a bigger company.

‘Having a disabled son changed my outlook on life’

Be prepared to collaborate

We’re also starting to see many startups collaborate for commercial success. By partnering with another company in a complementary space you have an opportunity to then take your services into a bigger business.

The larger business can then offset its risk by not putting all of its eggs in a single, tiny basket. 

Demonstrate the importance of culture

Startup founders are much more conscious of making a positive difference from a cultural perspective.

We’re already seeing startups establishing more diverse teams and giving opportunities to people from all areas of life. Diversity is more critical than ever.

As a startup, if you can demonstrate the positive difference this makes, you’re more likely to appeal to a bigger business who understands the benefit of having diversity but not how to approach it.

Show how to report ESG

Startups increasingly have to report their ESG performance to investors, as decisions on whether they will receive funding or a partnership opportunity may be tied to it. 

This means startups tend to be more conscious of how to go about structuring ESG reporting. There is such a huge amount of data around sustainability and climate from a business point of view, but it’s very fragmented. When you achieve strong ESG credentials, ensure you can prove it.


Final thoughts

Being able to develop and scale as a startup, while helping the established side of the industry move in a much more sustainable direction is a winning combination.

If you can demonstrate real-world value, there’s plenty of interesting opportunities for smaller businesses to help bigger businesses evolve. Sustainability is no longer a problem for future generations; it’s imperative to do the right thing, now.