Sustainability is the new kid on Startup Block
The concept of entrepreneurship covers many types of organizational and individual activities but it takes its most obvious form in the decision by an entrepreneur to start a new business. In recent years, we have all tried to give answers to questions such as: 'What conditions support business start-ups?'; 'Why do individuals decide to become entrepreneurs?'; 'What impacts do start-ups have on the economy?'
Environmental business management is the new mantra for start-ups, being a sensible starting point for making an impact. It was no secret that starting a new business venture is a very complex process. Start-up entrepreneurs have to comply with a variety of external demands. Business advisers and funding as well as market conditions often interfere with the pursuit of ecological business practices. The most crucial factor for environmental considerations in the start-up process is the entrepreneur him or herself. It appears that the pandemic has provided a unique opportunity for governments and businesses to refocus on more sustainable ways to achieve economic prosperity.
During my interaction in the ecosystem, one thing that emerged was Sustainability is becoming a priority. Now many factors will motivate a startup to operate in sustainability zone or address issues relating to reduction of carbon footprints. In fact recent research by Gartner showed that 82% of businesses intend to invest in ethical sourcing. as “it is the right thing to do”. It is no surprise that companies that were espousing the cause of sustainability were highly motivated intrinsically instead of any external pressures.
Altruistic principles are clearly a critical factor. Coupled with this, there is a vast amount of data underlining the increasing importance that customers place on sustainability when choosing brands to spend money with, and even the potential to charge a premium for sustainable products. It is perceived that environmental sustainability will become one of the highest priority by customer when choosing products or services in next five years. In fact, consumers are willing to spend 12-15% more for sustainable items.
Today what to talk of funders, even employees are attracted to businesses with sustainability commitment. Millennials have refused to work for companies they felt were harming the world. Another important aspect intrinsic to sustainability is cost savings - less waste and more efficiency gains. The fallout of such practices is that it can help startups to access finance. Startups with green credentials are increasingly attractive to investors, with climate impact being a major criteria. There is a huge scope for improvement in the field of sustainability. The benefits are vast and the road to success is paved with obstacles. The key focus is going to be in ensuring own survival, innovation and growth coupled with carbon footprint, sustainability of supply chain and brand value regarding climate change and how to integrate it in their business plan.
Sustainability is a diverse, far-ranging, and rapid-evolving subject. It is asking a lot, therefore, to expect any single startup to develop meaningful plans to become sustainable on its own, let alone if the company is running on tight resources is a big ask.
A collaborative and open approach is important. This collaboration can take place within the organization, with other startup companies, or with customers. Each group will have valuable insight into what the business can do better. Not every company, employee or customer will be a champion for sustainability; however, there will be some that will likely have useful ideas to help a tech Startup develop its own green strategy. Importantly, the science on sustainability is constantly changing. What is considered best practice now might not be in a year or two.
The term ‘SMART goals’ (targets that are specific, measurable, achievable, realistic and timely) has become common parlance in many business circles. Some might dismiss this as management jargon, but certainly when it comes to sustainability, there is value to this approach. As such, startups should listen, learn and continue to adapt their policies and actions in order to achieve an effective sustainability strategy in the long term.
It is clear that sustainability, climate change and the environment are going to remain integral issues that businesses of all sizes and across all sectors must address. It is a challenge that business leaders in the tech industry must therefore embrace, and by considering some of the options suggested above, they can pave the way for creating the greener businesses of tomorrow.
In becoming more sustainable, not only will startup companies play their part in tackling planetary issues, but they also serve to benefit in various ways. One feature common across most approaches is the need for consistency – improvements can typically only be achieved in the long-term through changes in mindset, behavior and resourcing, coupled with clear practical steps along the way.