How Sustainability is Supercharging the Startup Scene

Huckletree's Editorial TeamThe Editorial TeamHuckletree1/29/2021

Sustainability is big business. According to Dealroom, European startups working to tackle climate change attracted €9.8bn in VC investment over the last five years. The narrative around sustainability has shifted in recent years from individual responsibility to corporate obligation – and startups have a huge role to play in that. 

Startups have the ability to create positive impact and environmental change through digital technology, innovation and solutions – when given the right support. The numbers speak for themselves – in 2019, investors poured a record-shattering 120 billion into sustainable investment options, and in the UK alone, there’s believed to be £17 billion invested in ethical funds. And it’s no longer just about Keep Cups and tote bags. In every sector, sustainability has become a focus – with more money, research and innovation being poured into these ventures across industries than ever before – sustainable investments have grown 107.4% annually since 2012.

Introducing the Alpha Programme

Startups may be the solution to global warming, but more help is needed. We need action over conversation. Innovation over thought-leadership. New ways over old habits.

Which is why we’re proud to announce the 2021 Alpha Programme with an important theme: Sustainable Planet. This eighth edition of our 12-week accelerator will virtually bring together a cohort of purpose-driven, for profit organisations working on innovation and technology to encourage consumers and companies to improve the impact of their everyday living and operations. 

The programme is open to startups with under-represented founding teams and each cohort will benefit from workshops and fireside chats with investors, pitch practice, demo day to 100+ investors, connections to relevant partners and bespoke guidance from the Huckletree Growth team. The programme will be delivered by world-class experts across the sustainability domain, from entrepreneurs to investors, to help turbocharge the new generation of impactful businesses in the UK and Ireland. 

The Future of Sustainability 

But what does 2021 hold for the sustainability sector? And what are some of the biggest trends emerging in the scene to watch for? I spoke to industry experts to discover the most important insights, trends and forecasts into sustainable investing and startups in the coming year. 

One thing that stood out to me is that it’s no longer a conversation on if a startup is going to be sustainable, but how they are going to be sustainable. Every business needs to put sustainability at the heart of their business operations if they want a bright future. Martin Rich, Co-Founder and Executive Director of Future-Fit Foundation, told me:

“The most successful companies of the future will be those that embed true sustainability into every aspect of how they do business. This is no longer optional - environmental and societal pressures are real and you ignore them at your peril. Any business starting out today can - and must - bake this thinking into their DNA and build a resilient business from the ground up. Those who don’t will fail.”

ESG Investment: A Sustainability Trend 

In the wake of the Covid19 crisis, environmental, social and governance (ESG) investing will be gaining further momentum in 2021, as business goals align further with the world’s most pressing societal issues. Investors are increasingly incorporating ESG values into their investment criteria – meaning businesses are being held to higher standards and scrutiny of their working practices. 

Martin Rich argues it’s no longer a choice between being a ‘mainstream’ for-profit business or a ‘social enterprise’. In order to create a world in which people and planet can thrive, every business of any size must play its part in becoming environmentally restorative, socially just and economically inclusive. 

Startups must answer this question:

“How can I create system value – that has a positive impact on business, society and the environment - without locking harmful impacts into the process?”

His advice is to look at both sides of the coin. Firstly, what is your purpose as a business? What is the solution you are trying to provide for the planet or society? What is unique about your offering? Secondly, identify the potential ESG risks in how you deliver your purpose. Are you relying on inherently unsustainable practices in order to achieve your ‘positive’ outputs? Now put the two sides together: how can you radically change the game to achieve your purpose with reduced negative consequences?

Martin says that sustainability is more than badges and box-ticking, it’s about changing the way you do business. Consumers are getting increasingly savvy about greenwashing – and aren’t afraid to call out businesses who attempt to conceal the truth from their customers. It’s about creating a system that works for both your business and the planet – one that is authentic, sustainable and impactful. 

A World a Little Less Disposable 

Olivia Ahn CEO of Planera, the UK’s only certified flushable and biodegradable sanitary pads, believes that investing in sustainability is not just an investment for the planet and people, it’s good business sense. She says:

“With over 66% of global consumers who are willing to pay a premium for a sustainable product, there is ample opportunity for innovation across industries. When looking at the consumer product landscape, I see companies pushing the burden of sustainable disposal onto consumers causing guilt, confusion and frustration at the point of disposal. Product-facing companies need to make sustainable habits easier for their consumer, not harder.”

For product-based businesses, making disposable products that are actually easy to dispose of is crucial. Disposable products should be convenient and sustainable – it’s not necessarily about changing consumer habits, but making it easier for the consumer to be sustainable in the first place. Large legacy companies have huge operational structures, and often products, that are not inherently sustainable – with record-breaking global warming in 2020, we recognise that we must change to ensure that we do not destroy our only habitat in the universe.

Circularity is another exciting sustainability trend; whether it’s upcycling furniture, selling second-hand clothes or sharing cars, the ‘closed loop economy’ allows communities to share goods and spread the cost of consumption. Reusing, recycling and re-homing goods is another way startups can create positive impact for the planet with  digital technology. 

Going Beyond Clean Technology

Tim Boote, Founder of Protein Rebel, believes that investors are looking for innovations beyond clean technology. That, although clean technology, defined as technologies that reduce or optimize the use of natural resources, is one solution – it’s not the only one. He says:

“The environmental emergency is becoming increasingly urgent. The pandemic has highlighted the very real impact of the continued human encroachment into wild areas with zoonotic diseases like COVID-19 more likely. Finding solutions to this, as well as the climate crisis, means that startups addressing one or more of the UN Sustainable Development Goals are becoming increasingly attractive.”

As an emerging trend, we’re seeing more and more food startups providing new types of sustainable proteins – as traditional meat and dairy proteins require huge amounts of food, water and land, contributing to rainforest destruction. With the UN forecasting that we will need to produce 70% more food by 2050 to feed the growing Global population, diets heavy in meat and dairy just aren’t sustainable. 

And whilst plant-based foods are having their moment, they are not the only solution – after all, plants still require large amounts of land, water and fertiliser. In fact, a whole new sustainable protein market is gaining traction and attention – the edible insect market – and investors must sit up and take notice. Once considered a gimmick, this market is now being taken seriously and is beginning to move from the fringes into the mainstream. In fact, the market is expected to grow by 26.5 per cent, reaching a market value of $4.63 billion worldwide by 2027. 

If you’re a sustainability startup looking for support in funding and your next stage of growth, you can find out more about Huckletree’s 2021 Alpha Programme: Sustainable Planet here and apply here. Remember: what you create today has a ripple effect for years to come, so now is your chance to shine, create and inspire for the better.

Huckletree's Editorial Team

Curiosity may have killed the cat, but it sure can’t touch the Huckletree Editorial Team. If there’s an angle, they’ll find it. A stone unturned? They’ll turn it. This gang of wordsmiths and renegades know how to spin a story. Hear from them the insights of the startup ecosystem.

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