Startups steer innovation and opportunity, disrupting markets and reshaping industries through unique business models and distinct selling points. There is a great opportunity for growth and development in a startup and as it enters the competitive landscape, there is a need to ensure the business can sustain itself in the long run.
A startup finds itself preparing for numerous challenges internally and externally. It seeks growth and profitability. It aims to capture new audiences and ensure retention, loyalty, and commitment. To achieve their goals, a startup finds itself innovating and creating unique solutions, while minimizing risks and roadblocks that hinder success. Yet as the world continues to change, a startup needs to adapt quickly, by establishing failsafes and risk management strategies in its early stages to ensure a secure and sustainable future. A startup steers innovation and opportunity. In order to survive and thrive, a startup must ensure its business model is sustainable.
For startups, sustainability can mean ensuring the company can grow and support itself while ensuring little to no harm against people and the planet. The world is in need of new solutions, goods, and services. Consumers and younger generations are more likely to purchase from sustainable brands and companies. Industries and markets are evolving– with more and more businesses developing sustainable portfolios and changing their own business practices. For the world to move forward towards sustainability, companies can take the lead by providing sustainable goods and services.
Startups steer innovation and opportunity. It is best not to be left behind in this sustainability journey. Here is how you can get started.
Integrating sustainability into your startup is no longer going to just be a unique selling proposition. In the future, sustainability will become an essential pillar to keep your startup afloat.
Businesses and economies are being shaped by climate change. Beyond the creation of new markets due to climate change, new laws and regulations call for companies to be transparent and accountable towards their impact towards society and the environment. Sustainable development goals have pushed businesses to shift from their current practices and establish new changes that contribute to sustainability targets. While these regulations often target larger corporations, that doesn’t mean a startup shouldn’t practice sustainability. The interconnectedness of supply chains can also affect startups due to the growing need for sustainable suppliers and stricter supplier screening. In addition, environmental and human rights policies can also impact business practices, thus a startup needs to be knowledgeable on how to operate under these regulations, decreasing the risk of violations and a loss in business reputation.
Investors and capital markets also play an important role in integrating sustainability into a startup. Investors consider ESG during decision making and evaluate sustainability practices and performance on a portfolio level. Furthermore, with the addition of loans and funds from investors seeking to diversify their portfolio with sustainability-related ventures, startups dedicated to sustainability may have an advantage and opportunity to scale and accelerate their growth.
Sustainability isn’t just a buzzword anymore. It is a way to minimize operational risks. It is a way to increase market share by attracting sustainability-conscious consumers and markets. Practicing sustainability can improve supply chains and operations. Like a startup, sustainability steers innovation and opportunity, from new technologies to job creation.
Yet to embed sustainability while scaling a startup can pose challenges as you venture into both your market and the complex sustainability landscape. Finding ways to connect these two together can be confusing. Don’t worry; here are a few tips on how you can get started.
Understanding your business and how it operates is the first step in clearing away all the confusion you might experience as you go through the process. You know your business best. You understand the industries you operate in and operate with. You know your audience and your stakeholders. By understanding yourself, you can start mapping out your sustainability journey.
Take a look at your startup and lay it all on a clear comprehensive map. How does your value chain work? What does the lifecycle of your product look like from its resources to its waste? How do you keep your business afloat? List down your hardware, your office supplies, and the tech you use. List down your suppliers and all the materials that bring your goods or services to life.
Using this visualization, it’s time to get to know your stakeholders and extensions related to your business. Your stakeholders can include consumers, employees, laborers, suppliers, investors, and key players or figures in your industry, from governing bodies to local communities. Look into how your business connects and extends to others. Review how your startup affects these communities. Understanding the behavior of your stakeholders, their lifestyles, cultures, and work, can help you plot different strategies and create new solutions that target pain points. To get a better visualization, reach out to your stakeholders and engage in dialogue with them. This can help you learn more about them, and how climate change impacts them.
The next step is connecting your understanding of your business to the sustainability and ESG landscape. Note down the challenges, risks, and opportunities you face. How do you interact with the environment and how does the environment and climate change affect you? How much waste do you produce or how much emissions do you create? What are the social norms and practices that you need to observe and how can we further enhance the quality of life of your stakeholders? What systems have you set to ensure your startup is ethical, accountable, and transparent? How can I do more good and do less harm?
After reflecting and writing down these challenges and opportunities, you might be left with a lengthy list of topics and subtopics that may leave you speechless because you might be unsure of where to start. But when it comes to sustainability integration, it is important to remember that you can’t do everything all at once.
Start where things matter most to your business and your stakeholders. This is where your materiality matrix comes in. What poses great risk and concern to you and your stakeholders? What can you control? What generates the most significant impact? What is the most relevant issue you need to address? What will impact you in the long run?
You can’t solve every problem at once. To do the most good and do the least harm, setting sustainability goals that target crucial and relevant issues can minimize climate-related risks and future-proof your business, allowing you to focus more on scaling your startup sustainably.
Now it is time to scale your business with sustainability in mind. Focusing on your sustainability goals and targets, restructure and reshape your operations to make room for sustainable practices and strategies. Consider shifting to energy saving technology. Find ways to minimize and properly dispose of waste. Embrace practices that reduce your carbon emissions. Strengthen systems built to ensure data privacy and security. Keep your employees engaged and empowered to practice sustainability.
Your opportunities to grow your business while being sustainable are extensive. It is important to anchor your strategies on your sustainability and business goals as these can help you unlock new opportunities that improve your operations or change your current product and service into something more sustainable.
As your business continues to grow, you also might start to encounter bigger challenges you may not have foreseen or underestimated in the early stages of developing your business. These challenges allow us to reflect on our systems and explore new solutions. Thus even before scaling, you need to look back at your value chain and look further into the future to manage risk and ensure little to no disruptions as you grow. Engage with stakeholders and other businesses that provide sustainability solutions and allow open spaces for knowledge sharing as we all continue down this sustainability journey.
Startups steer innovation and opportunity and sustainability opens greater doors that increase the capacity for growth if business leaders make the most of the opportunities from these adverse times. It doesn’t always mean creating a good or service that acts as a force for good. Being sustainable includes minimizing the risk you pose on the environment and minimizing the risk the environment poses on your business. It can also mean improving the lives of your stakeholders. If you have a strong sense of what you believe in, if you have a clear vision of where you want to take your startup, implementing sustainability strategies will not be as hard as it seems.
History allows us to reflect and grow from past mistakes. By measuring your sustainability performance and keeping track of your growth through the use of ESG data management systems, you can map out where you are now in your sustainability journey. Managing data is essential when practicing sustainability. This encourages and fosters transparency and accountability. Having records can also strengthen communications with stakeholders and investors who are seeking numbers that show the impact you have already made.
When you have a clear picture of your sustainability progress, you can start to evaluate what needs to be improved and how you can accelerate your efforts. Setting baselines and KPIs can keep you on track on the path towards sustainability. In addition, establishing ESG data management systems can make the practice easier and can foster a stronger culture of sustainability in your startup.
Strategies have been implemented and efforts have been made to transform your startup into a sustainable business. Sharing your story is an important element in sustainability integration. Transparency is key in strengthening stakeholder relationships and your startup’s reputation. Sustainability communications can be challenging with the risk of greenwashing, yet authentic and honest reporting is better than telling a story with no data-backed evidence or with words, labels, and claims that inflate performance or provide little to no clarity on what you do.
When communicating your efforts, be honest and embrace vulnerability. Take pride in your achievements and acknowledge your setbacks. You may have to report shortcomings, but you can focus readers’ attention on your learnings and how you will grow and improve in the future. Numbers matter to stakeholders, especially investors. Customers and audiences would also like to know more about your initiatives, and thus your communications strategy must also include comprehensible content that resonates with consumers. There are many ways to communicate your sustainability progress, but the best way is rooting yourself in transparency.
Understanding your company, understanding your stakeholders, implementing strategies, measuring and communicating are crucial activities if you want to be a sustainable startup. The road to sustainability is challenging. It is important to equip yourself with resources, tools, and talent that can accelerate your sustainability efforts and further integrate it in your startup as it continues to grow and evolve in a changing environment.
At Keslio, we are deeply passionate about sustainability, equipping us with the expertise and extensive network needed to guide clients through their sustainability journey effectively and efficiently. Our expertise is particularly valuable for companies looking to embed sustainability practices into their businesses and investors looking to integrate ESG and impact into investment portfolios. To learn more about how Keslio can assist your organization on its sustainability journey, please don't hesitate to get in touch with us.
