It’s exciting to see how start-ups are commercializing climate solutions at a rapid pace. A variety of opportunities exist – whether you are developing a new cleantech widget, bringing a disruptive business model to market or incorporating climate smart practices to your current business – that startups should take advantage of. And, today, it’s increasingly important to build climate and sustainability practices into your core business practices.
The market has evolved from this activity existing as an afterthought or add-on to it being at the core of a business’s strategy. For example, companies are realizing significant risk exists by not having a climate program, climate performance is being measured in the C-suite, and access to capital will depend on risk avoidance and climate program performance. Check out our recent post on why it makes sense for a companies to have a climate program in place.
For start-ups, integrating a climate and sustainability program into your business strategy is much easier early on than when you become a more mature company. It may seem overwhelming, but it doesn’t have to be and below we discuss some strategies that businesses can implement as they scale.
Establish Priorities that Grow With Your Business
Lots of reasons exist as to why it makes sense to have a climate program but, early on, it’s important to establish priorities are for your business – for your team, your customers, and your investors – so you can maintain a north star throughout your journey. We did this at Fresh Coast Climate Solutions early on and established a set of “Founder Mantras.” Holding yourself to how you want to treat your employees, your relationship to and respect for the environment, how you want to treat your suppliers and what kind of customers you want to conduct business with is paramount. Although you might be just getting established, the priorities you establish now can remain steadfast and grow with your company.
Set goals and targets
Setting specific climate goals and targets – and making use of existing indicators – facilitates identifying areas of improvement, enables progress to be measured, and ultimately allows for positive, achievable change. For example, you could establish a 100% renewable energy goal. At the onset, making sure all of your energy purchases come from renewable sources is possible through a local utility program. However, as your business grows, installing renewables may be necessary to maintain a 100% renewable goal. Regardless, establishing bold, concrete goals during your early stages of growth will make it easier as your company grows. Using frameworks, such as Science-Based Targets or a B-Corp Certification allow for standardized and socially aligned targets to be created for your business.
Establish Credible Impacts and Brag About Them
Once you establish foundational priorities, build credibility around your business model by establishing credible climate metrics that you can communicate. For example, it’s easy to establish an ESG framework that can grow with your company during your early stages of growth. Even if you don’t have a physical location or are not manufacturing a product, putting an ESG program in place will build credibility into your operations and will allow you to communicate program components with potential customers and investors. Additionally, if you manufacture a widget, establishing credible impacts through an Impact Analysis, LCA Estimate or LCA Assessment will position you to communicate the environmental benefit of your product against the status quo. Doing so will help you meet the climate needs of your potential customers, partners and investors. Likewise, growth stage companies that might already have a facility or operations in place can utilize the advantages of conducting a Scope 1, 2 and 3 GHG emissions inventory or a GHG baseline assessment. Again, having these items in place will provide you with the relevant information to communicate with your ecosystem and position your business model against the status quo.
Leverage Climate Financing
Financial institutions are changing the way they view climate risk through the understanding that “Climate risk is business risk.” Or, as we like to say at Fresh Coast Climate Solutions: “climate risk puts everything at risk.” We’re experiencing a tipping point in the financial industry with a flow of capital not yet experienced. Climate focused funds such as Just Climate, Breakthrough Energy, and Energy Impact Partners, among others, are actively investing capital in climate solutions. Additionally, traditional banks are incorporating climate due diligence into their analysis of loans, investments, and financing products. According to PWC, the pressure from financial institutions will touch everything from a company’s credit rating, valuation, cost of capital, borrowing capability and insurance. What does this mean for you as a start-up? In order to access capital, it will be helpful to have a climate program in place such as an ESG framework a Net-zero strategy. It will also be helpful to have an Impact Analysis in place to attract venture capital or private equity funding to your idea.
Don’t Accept Status Quo as Acceptable
Remember, you have the ability to set the course of your business, execute against the priorities that you establish, and change the status quo. Are the mainstream solutions and ways of doing business – single use products, one way supplier / buyer relationships, and inequitable compensation across an organization – solving the demanding needs of the climate and your workforce? Be bold with your solutions and challenge the status quo by bringing innovative ideas to the market.
Developing a sounds climate component of your business’s go-to-market strategy – whether it’s a broad-based ESG program or a specific Impact Analysis of a product – will help you establish credibility and differentiation within the market. It will help you meet customer requirements, establish partnerships and secure capital from investors. Fresh Coast Climate Solutions has the expertise to support you through your nature positive journey, providing guidance and technical expertise to help reach those ambitious goals.