As we all know, startups are very time and resource constrained and have to prioritize heavily. Therefore, we have developed a lean approach on how you can work with your portfolio companies on sustainability with the biggest possible impact.
The goal is to embed sustainability and thereby long-term thinking early on in the startup’s DNA to pave their way for later success. We believe this may be the biggest lever for venture capitalists to contribute to sustainable development.
In A Nutshell
In our corresponding Startup Playbook, we have mapped out a more detailed and comprehensive approach for startups. However, here are the most important steps in a nutshell. To get started with your portfolio companies, we recommend a workshop to enable startups to
- identify the material sustainability issues for the startup, meaning the biggest sustainability opportunities and risks,
- prioritize key issues they are able to focus on in the next 1-3 years,
- set SMART (Specific, Measurable, Achievable, Reasonable, Time Bound) ambitions and objectives for these key issues as well as KPIs to track the progress,
- derive an action plan to make this progress within a specific timeframe, and
- implement minimum standards required for those topics that might constitute risks to the startup.
Ideally, the startup is then capable of finalizing its own sustainability strategy in one or two internal workshops.
Next, agree on and set up an accountability and reporting framework…
- …to integrate sustainability aspects into the startup’s management system,
- …with clear responsibilities for collecting, tracking, and measuring the progress as well as for achieving the objectives,
- …with regular reporting cycles for board meetings, and
- …which the startup can possibly also use for external communication.
Case Study: Fazua
In the summer of 2020, Fazua set out to work on a holistic vision and strategy for its startup.
Together with SYSTEMIQ and UVC Partners, they developed their systems map (Read more in Chapter 3) and identified their material issues, as well as opportunities and threats to their business. Then they derived their objectives and action plan for the next five years.
Here you can find Fazua’s sustainability strategy
Always being one step ahead of our competitors. Doing our best to become the most environmentally-friendly drive system for e-bikes.
– Fazua’s vision
- Identify and prioritize sustainability topics that are material to the business of the portfolio company and how they are a business opportunity or a risk to them.
- Align on an ambition level and formulate sustainability-related targets as well as the activities and processes to reach them.
- Set up sustainability KPIs to track and assess the portfolio company and put sustainability topics on the agenda in all board meetings.