Scaling sustainably: Balancing carbon footprint and growth

MAR 14, 2023

BY BALDERTON

We were delighted to host an event in Berlin last month to discuss how tech start-ups can manage their carbon footprint alongside growth. Huge thanks to our panellists – Janina Bauer, Global Director of Sustainability at Celonis, Arnavaz Schatten, Director of Sustainability & Impact at Infarm and Luis Orsini-Rosenberg, co-founder and CEO of CYCLE, and our Head of Impact Elodie Broad for moderating.

As the world races to net zero, it’s essential that businesses of all sizes have a firm grip on their carbon emissions. However, as a company grows, so does its carbon footprint. This poses a tricky dilemma, which is particularly acute for high-growth startups, leading many to feel like it’s a lost battle, or one for later.

How should you balance and manage the tension between growth and sustainability? There is no easy answer, and no one-size-fits-all approach, but our panellists provided some great advice on how to start thinking about this.

  1. First, get comfortable with this universal truth: Your carbon footprint will grow as your company grows – unless you are building carbon removal or carbon avoidance solutions. But this doesn’t mean that you shouldn’t be taking action.
  2. Measure your footprint. You can’t improve what you don’t measure, so start by measuring your scope 1, 2 and material scope 3 emissions. You may be surprised to see that your biggest emissions drivers aren’t directly linked to your direct operational footprint, and therefore your emissions won’t grow one-for-one with your operational growth.
  3. Factor carbon into your policies from day one. Be it an internal decision-making framework or your supplier policy, you can curb your carbon footprint growth by integrating it into all aspects of your business decision-making.
  4. Introduce an intensity measure and set intensity-based reductions targets to focus and evidence your efforts. Intensity metrics are typically emissions per employee or per dollar revenue.
  5. Find the win-wins: Efficiency initiatives will often deliver cost and carbon footprint savings while technological innovations will drive growth and differentiation for your business while also resulting in reduced carbon intensity.
  6. Switch to 100% renewable energy to start decoupling economic and carbon footprint growth. This may have more or less impact on total footprint depending on your emissions profile (i.e. the benefits will be relatively greater for energy intensive operations).
  7. Use offsets wisely: Offsetting should be the final part of your carbon management plan and reserved for emissions that are very difficult to reduce. Carbon offsetting may be considered greenwashing when companies do not prioritise in-house emissions reductions, double-count carbon credits, or invest in non-verified credits.
  8. Avoid the carbon tunnel: While only a reduction in greenhouse gas emissions will curb the climate crisis, it is important to consider a company’s societal impact holistically. Your company’s carbon footprint is instrumental in delivering your company’s bigger purpose and societal impacts.
  9. Be open and transparent: If your footprint is growing, acknowledge it and explain why, and what measures can be taken to reduce it. Remind your stakeholders that you are managing a complex systemic challenge, and that not all the solutions sit with you as an individual business.

At the end of the day, the most important thing to do is to just get started. Find out our panellists' top tips for startups embarking on their climate action journey in our next post.

Thanks again to our panelists - and to our audience - for coming along and bringing such valuable insights. We look forward to seeing you again soon!

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