ESG initiatives: how startups can reduce their environmental impact

By Katerina Mansour - 07 February 2023

We’ve officially arrived to the third and final installment of our ESG series, covering how startups can take steps early on to implement an ESG strategy. The goal of each article has been to show how even in the early stages of a business, actions can be taken with limited resources to improve your environmental, social and governance practices. Today, we’re focusing on your company’s environmental impact.

As a reminder, measuring ESG performance is becoming increasingly common in the business world and startups stand to benefit from adopting ESG practices. While it’s generally understood that early stage ventures have had less time and resources to implement advanced ESG measures, taking those steps even in the early days can have a significant impact on the future of your business.

Indeed, your ESG positioning can help attract investors, secure top talent, save money and improve brand image. However, when asked what was stopping startups from implementing ESG practices, 58% cited lack of resources, 49% cited lack of time and 48% cited not knowing where to start (EDHEC, Station F).

In this article, we look at some of the first steps you can take to reduce your company’s environmental impact and help the environment as a whole. We also try to keep in mind factors like lack of resources and time in our assessment of each step.

First, you must identify which ESG factors apply to your business

Every industry has a different impact on the environment. Depending on what sector your business is in, not all ESG factors will be relevant to you. For example, water and waste management are likely to be more important for a startup manufacturing textiles than for a SaaS company. Furthermore, as an early-stage company, you may not necessarily have reached a scale that will have the same impact a larger business in your industry would have on the environment.

Therefore, it’s important to take a step back and look at which factors you think require the most effort in your business and also which ones you have control over. For example, if you operate in a co-working space, your control over environmental practices is limited, though you can exert pressure on the company to change its methods. However, it would be a mistake to assume that just because your company is small it doesn’t have any impact. Or that since you’re in a co-working space, you cannot do anything at all in terms of environmental efforts.

Below we identify a few key actions you can take that are typically sector-agnostic. You’ll also find examples of startups offering innovative solutions in each category.

Measure and track your carbon footprint

According to SME Climate Hub, 63% of SMEs cite lack of skills and knowledge as the reason behind delaying climate action. To acquire said knowledge, turning to experts can be a first step. However, traditional consulting can be quite a lengthy and costly process.

To counter the challenges posed by traditional consulting services, many startups have developed SaaS platforms that automate carbon footprint assessment and tracking. Although less expensive, they still require a significant investment depending on the type of solution and features you opt for. However, this assessment can be an invaluable resource to push your ESG strategy forward. Indeed, establishing where your company stands today can be a first step to determining what your company’s ESG strategy will tackle.

After assessing your company’s carbon impact you’ll be able to see clearly which verticals require your attention: waste management, transportation, water management, energy efficiency, etc. Over time, these SaaS solutions can also be used to audit your carbon footprint’s evolution. This will help ensure you stay on track and also assess new areas of improvement as your business grows in size. Beyond being a step for the environment, assessing and continuously monitoring your carbon footprint can also help your business reduce costs.

Here are a few startups that can help in this area:

  • Fruggr empowers businesses to become more sustainable by assessing the carbon impact of their digital activities.
  • Carbo develops a carbon footprint assessment platform with payment plans adapted to all company sizes, from those with 1-9 employees to those with 500-999 employees.
  • Greenly’s carbon footprint assessment and management platform adapts to your industry and to your company’s maturity. Its platform also provides features to help you collaborate with your team on tasks to reduce your carbon impact.

Furnish and equip your office sustainably

In Europe, 80-90% of all furniture ends up in landfills. Meanwhile, in the United States it’s estimated that 9 million tonnes of office furniture ends up in landfills each year. This problem is not exclusive to furniture. On a global scale, we generate around 40 million tonnes of electronic waste each year. Much of this waste could be entirely or at least partially avoided through refurbishing, reuse or upcycling.

Given the number of startups offering solutions to sustainably furnish your office and equip your employees today, this can be a relatively easy win to help reduce your company’s environmental impact. For your office furniture, instead of buying new items you could rent refurbished items or buy furniture made from recycled materials. Many startups offer solutions along these lines, with varying ranges of budgets required and financing options available:

Here are a few startups that can help in this area:

  • Dizy Design is a French B Corp certified company that designs and manufactures furniture locally from recycled or recyclable materials. The startup also offers custom furniture design and commits to planting a tree for each order received thanks to their partnership with Tree Nation.
  • Cleaq offers an IT equipment rental service for companies. In addition to the rental and management tools for your equipment, Cleaq also provides unlimited assistance to your employees.
  • Room in a box develops a unique range of sustainable furniture that is made from sustainable materials like corrugated cardboard or organic cotton. The startup also opts for carbon neutral shipping and plants a tree for each product sold through its partnership with Eden Reforestation Projects.
  • Bluedigo offers you refurbished office furniture or new eco-built furniture that can be used at your offices or at your employees’ homes for those that work remotely. The company will also buy back your furniture once you’re done using it or decide to change it.

Coach your employees to be more eco-conscious

Raising awareness among your employees is arguably one of the first steps to take in your ESG journey. Furthermore, it doesn’t require a significant amount of time and resources so is largely feasible in most situations. While you can certainly choose to create your own resources to train your employees (team presentations and workshops, access to research, etc), you can also work with many startups that encourage environmental activism through team activities.

These startups will either plan a workshop with you and your employees to help educate them, or they might organise a teambuilding activity around sustainability. The key benefit here is to ally education with fun so that employees will be more likely to retain what they learn and continue to take action later on. Environmental challenges/contests at the office have also emerged as a great tool to raise awareness. It “forces” employees to make changes to their daily lives by adopting more eco-friendly habits. They may then decide to adopt these habits on a long-term basis to reduce their environmental impact.

Here are a few startups that can help in this area:

  • Ma petite planète organises environmental challenges that can be done at school, between friends and family or at work. The startup provides a list of actions players can take that split into various categories: not eating meat for a week, unplugging all your electronics before leaving the house, composting at home, etc. Each of these actions comes with resources and insights on how it impacts the environment and tips on how to reduce your individual impact. Employees split into teams and track which actions they take through the startup’s app. They win points for each of their successes and the team with the most points of course wins the competition.
  • Day One develops a platform for employers to provide their employees with access to volunteering opportunities. The startup has a network of over 400 charities/associations that provide a wide variety of volunteering missions employees can join based on their skillsets and interests. Employers can then access reports that provide key insights on their employees’ impact through participation in these volunteering missions.

Adopt a Green IT approach

Most companies will have a digital presence regardless of their sector. This may include storing data on servers or owning a website. Today, a growing number of startups are helping your IT become greener. Indeed, it’s important not to forget that your company’s digital activity can also have a significant environmental impact.

Here are a few startups that can help in this area:

  • Greenmetrics develops a web platform that allows companies to measure the environmental footprint of their IT equipment and software. The startup then provides personalised recommendations to improve your carbon impact.
  • Ecosia has developed a search engine that plants trees each time a search query is made through its engine. The startup has collaborations with local organisations in over 35 countries to help restore and protect biodiversity. You can use the search engine through their website or have your employees directly install it as an extension in Chrome. This small gesture helps your company have an impact by opting for a more sustainable search engine.
  • Ecoping develops a solution to help reduce your website’s carbon emissions. The startup assesses the current impact your website has based on the resources it uses, where its servers are hosted, etc. It then provides insights and actions you can take to improve your footprint. You can also benchmark your website’s carbon footprint through Ecoping.

Assess your suppliers’ environmental impact

Partnering with local and eco-friendly suppliers is an important step when looking at one’s environmental impact. According to McKinsey, 90% of a company’s impact on the environment comes from supply chains. Supply chains can also represent significant risks when it comes to your business operations, as illustrated by the recent supply chain crisis experienced by businesses worldwide. ESG practices can help reduce this risk. Two key strategies include working with more local entities and actively auditing your supply chain.

Many of the companies that offer solutions to calculate your greenhouse gas emissions integrate a component dedicated to your suppliers. The goal is to audit your suppliers’ environmental practices to see where they stand and thus establish how or if you move forward with them.

Here are a few startups that can help in this area:

  • Greenly’s carbon emissions assessment platform also includes a suppliers component. The startup establishes a score that indicates the maturity of your suppliers’ carbon strategy, based on data from a questionnaire sent to them.
  • Circulor helps companies measure the emissions of each stage of the supply chain and assess the sustainability credentials of their suppliers.

Adapt your company transportation policy

Transportation is one of the factors that will highly vary based on your business and its activity. Not all companies have business trips and other travel requirements. But for those that do, finding solutions to reduce the environmental impact of travel can be an easy first step to implement. For startups that don’t do business trips, it can still be interesting to look at how your employees commute to work. If many of them drive, implementing a company-wide policy that incentivises soft mobility could be a good option.

Many startups develop solutions to help encourage more eco-friendly work commutes. This includes carpooling coordination platforms and the rental of e-bikes. Offering the possibility to work remotely also helps contribute to lower emissions generated by employees.

Here are a few startups that can help in this area:

  • Klaxit develops an app to encourage commuting to work via carpooling. The app simplifies the process of finding people to carpool with to your place of work or simply planning the carpooling with your co-workers. Employers can thus partner with the startup to implement a carpooling strategy in their business.
  • VanMoof offers an e-bike subscription service for companies to provide their employees with access to an efficient and sustainable transportation mode to work.

Ultimately, it’s important to understand that every process and practice you implement needs to be part of a long term vision. There’s no quick fix and few quick wins when it comes to sustainability for a business. If you just look at what can be quickly done and only care about superficial changes, you will not have implemented effective ESG measures. Caring and acting for the environment doesn’t need to be at the core of what your product’s value proposition is, but it can be at the core of how you deliver that value proposition. We hope that the insights from this article will help you take those first steps to tackle your startup’s environmental impact!

All articles