Council Post: Why Startups Can’t Afford To Ignore Sustainability In 2021

Regional Director Americas, Director, Innovation Norway, Norway San Francisco & Silicon Valley, Board Director at Nordic Innovation House.

Governments across Europe grow more ambitious every year in their efforts to combat climate change. The European Union recently set new, tougher goals for member nations to reduce their emissions over the next decade. With the world’s climate continuing down a troubling path, these moves will not be the last as the world rallies to mitigate the damage.

Europe isn’t the only region taking the issue seriously. President-elect Joe Biden has promised to rejoin the Paris Climate Agreement when he enters office later this month. With more focus on the climate in government and more consumers, talent and corporate leaders engaging in the issue, startups should consider intersecting with sustainability not only as an opportunity, but also a necessity.

Agility and focus allow startups to bring innovation to the market more quickly than incumbents. And I believe the green finance market will continue to grow at a high rate, which will push more investment into areas such as renewable energy, waste management, biodiversity and carbon reduction. In 2018, sustainable investing assets totaled $30.7 trillion worldwide, a 34% increase from 2016. Over the next 10 years, I predict that number will continue to swell.

Startups stand at the center of this growth. According to a survey of 282 European startups by TechFounders, 55% of respondents believe sustainability will be essential to their companies’ continued success. This is the moment for startups to embrace sustainability from the beginning — and for companies that have not yet considered their sustainability initiatives to start doing so.

Trends In Sustainability

I believe that as time goes on, governments, private investors, consumers and even vendor partners will increasingly care about sustainability. Startups must recognize that growth and position themselves not only to accommodate those conversations, but also to lead them.

What could this growth look like in practice? From my perspective, local economies could see increased engagement from local customers. Just consider that a 2019 Nielsen survey found that 46% of consumers consider buying local to be a top priority. This tells me that consumers are increasingly looking toward local produce and product origin, and food industries will need to increasingly look to locally sourced options (as will any industries that can support local production of perishable goods).

I also predict that across the world, more businesses will look to reuse or recycle products, material and waste, given that more companies are planning to prioritize sustainability post-pandemic, according to CNBC. I believe this has the potential to affect how companies produce goods and how consumers consume, as well as open up value chains for new partnerships and players. Corporations might have to look for outside partners to help manage new stages in their processes and value chains, and startups can help fill these gaps.

Customers have grown more aware of issues involving animal welfare, responsible consumption and more. These concerns had already begun to encourage people to rethink their lifestyles before the pandemic, but Covid-19 pushed even more people to cook more from home and be mindful about how, when and why they go out.

Beyond consumer habits, new technologies are creating exciting opportunities for startups to push the limits of possibility in sustainability. From blockchain development for socioeconomic sustainability to artificial intelligence and 3D-printing for resource optimization and the creation of local jobs, I believe every leap forward creates a new opportunity for entrepreneurs to make the world a little better.

Tips To Prepare For A More Sustainable Future

Startups looking to join this sustainable revolution (or even better, lead it) should consider a few best practices as they grow:

1. Sustainable practices must be part of the company’s values.

Some companies believe they can check a box and “greenwash” their operations, which is investing in the appearance of sustainability without the substance. This never works for long. Consumers are savvy, and they recognize when companies do not practice what they preach. The same applies to diversity and equality initiatives: When companies talk about diversity without actually having diverse leaders and employees, audiences are understandably suspicious.

2. Assign responsibilities and targets.

The responsibility to drive sustainable practices across the company, both in the back-office and the core business, must be assigned as a real and influential role to someone. This person should be empowered and engaged, and they need to encourage employees, top management and clients to drive sustainability and aim for clear targets. 

3. Ensure your move toward sustainability is a sustainable one.

Sustainability must be built into the core business model of your company. Startups pursuing this goal should understand what their customers want, what those customers are willing to purchase, and how integrating sustainability throughout the company’s mission and products make sense. 

Founders aren’t the only ones who make sustainability work. As startups consider these practices, employees should play a major role in engagement and company accountability. Team members who help prove and communicate sustainability’s return on investment can help their businesses lead the next decade of work and, at the same time, have an increasingly rewarding work life.

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