How to operationalise

The following sections offer practical guidance and advice when it comes to the operational elements of ESG. While there’s no one size fits all approach, the below guidance covers what we’ve seen work well in early stage businesses - from incentivisation and ownership, to best practices when writing your ESG policy, to engaging your board and much more.

An overview of the operational journey:

Identify your material ESG topics
Write your inaugural ESG policy or impact statement
Assign owners
Engage your board
Set goals
Measure your progress
Communicate to stakeholders

At Balderton, we are committed to putting our expertise, support, and our network to work for our founders. For more operational advice for start-ups, visit Build with Balderton.

The most successful and strategic (i.e. value creating) ESG approaches are informed by materiality.

In the context of sustainability, materiality means focus on the ESG topics that matter the most to your business. To identify these, you need to combine two complementary lenses (also known as “double materiality”):

What ESG topics are most likely to impact financial performance. This could be internal (e.g. diverse talent; data privacy management; energy bills) or external (e.g. social unrest; consumer sentiment; extreme temperatures) social and environmental trends
What ESG topics are most impacted by the organisation. This focuses on how the business impacts the world it operates in, be it people or planet, and the responsibility that comes with it. Indirectly these could have an impact on financial performance as poor management/ aggravation of negative impact can lead to reputational damage and value destruction, while amplification of positive impacts could create additional value.

Note that what is material to your business performance will change as your business grows and diversifies, world events happen, and societal trends evolve. This is why an ESG approach needs to be highly dynamic, iterative and regularly evolved over time - and why OKRs provide a helpful goal-setting framework (more on this in our goal-setting and prioritising section).

Articulating ESG goals and priorities Copy link

This could be done through the lens of (1) business sustainability or (2) global sustainability, or a combination of both,

Business sustainability framing. Tying back your sustainability efforts to your core business strategy. For example, themes like responsible product design, or client service excellence would be woven. Sustainability would also be featured as a business value or strategic pillar.
Global sustainability framing. Articulating your contribution to global sustainable development goals. The UN’s Sustainable Development Goals (SDGs). This is a great way to signal alignment and engagement with the leading shared agenda for sustainable development. The colourful SDG icons are some of the widely recognised “sustainability visual identity” in the market, offering a common language for all system actors.

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Writing your inaugural statement or policy Copy link

Publishing a policy is a great way to create shared understanding and common definitions internally, while signalling awareness and intent externally.

Typically, an ESG policy focuses on business behaviour and operations. Meanwhile, an impact statement focuses on the impact the business is having in the world. Depending on your business priorities and stage, you may want to publish one or both of these.

In any case, it’s important to think carefully and choose the language that is going to work for you. Choose your winning combination of ESG/Sustainability/Responsible Business/Impact and policy/framework/statement/programme/manifesto/plan, to describe this one statement or document that articulates your awareness of and commitment to ESG and/or impact.

Some top tips to remember:

Add a quote from your founders or CEO - only if they mean it!
Keep it simple and forget the quest for uniqueness - prioritise something that will work for your business and your people, and can be easily actionable
Consider tying it back to existing frameworks, such as the UN’s SDGs - a language for sustainable development spoken by many, globally
The more you can tie your sustainability narrative to your core products and services, the better
Give your ESG programme a name to further personalise your ESG efforts

Examples to inspire you Copy link

ESG policies

Ezoic’s “Ezoic Cares” programme
Merama’s Sustainability statement
Vivenu’s Responsibility at Vivenu page
Beauty Pie’s ESG Commitments

Impact statements

Voi’s Sustainability commitment page
Vestiaire Collective’s Sustainability Manifesto
Infarm’s Impact Vision paper
Brigad “une entreprise a mission”

A company that has both

Wagestream’s ESG policy alongside its Mission statement

FAQs about writing your first policy Copy link

When should I write my first ESG policy?

While it’s never too late to write your first sustainability statement, we strongly believe that the sooner this is articulated, alongside or as part of your business mission and values, the more integrated it will be with your business strategy and brand.
The policy should directly shape or reflect the framework that you are or will be using to drive this agenda internally.

I don’t feel we’ve done much at all as a business, is it too early to publish a statement or policy?

Communicating awareness and intent is a great way to start your ESG journey. Authenticity and humility are your best friends. No lofty statements or pretending that you’re “working on something”. Acknowledging that this is a journey and that you’re only getting started.
In our communication section, we show how even some of the most mature and advanced businesses on this agenda talk about climate action, diversity and other sustainability topics as a journey and “learning out loud”.

What should be in an ESG policy (or equivalent)?

Start by acknowledging the need for greater sustainability and the role of business in shaping a more sustainable future.
Define and distil what this means to your business. Many statements and documents are structured around the three pillars of people (care for your employees, your customers, and the wider community), planet, and governance. Remember that the most successful strategic (i.e. value creating) ESG approaches are informed by materiality (see drop-down below).
Include commitments and targets if any have been set.
Set a cadence for the regular review of your statement and document, which should evolve as you take action.

Should I publish my ESG policy on my website?

This is up to you. Some start-ups prefer to keep their ESG policy document internal and only share it with some stakeholders (e.g. investors). We believe that an ESG policy is a powerful communication asset and should sit on your website, or a public-facing version of it at least.
Companies more advanced on their ESG journey may decide to publish a sustainability or impact report (see reporting section).

Have any more questions about ESG? Get in touch today.

Owners and sponsors Copy link

Without clear ownership and accountability, and backing from the top, ESG efforts are likely to stall or never truly get going.

Early-stage companies won’t have the resources to dedicate a role to ESG. And that’s perfectly ok, so long as there is clear founder backing and that the designated operator sees the opportunity to take on ESG under their wing as a growth opportunity.

Expressing founder commitment. Copy link

In early-stage businesses, the sponsor should be no other than the founder and/or CEO.
They should express early on the importance – and their personal commitment – to addressing ESG themes material to their organisation and value proposition, not only because it’s the right thing to do but because it is intrinsically linked to long-term value creation.
Aligning ESG visions and principles within a company contributes to developing a purposeful culture, which itself will be instrumental to implementing a seamless and successful ESG integration.

Finding the right owner(s). Copy link

Across the Balderton portfolio alone, we have a wide variety of role titles also looking after the ESG agenda, including: Founder, Chief of Staff, Head of Strategy / Strategy Business Analyst, Head of People, Finance Director, Operations Director, Marketing Manager, Head of Legal, Strategic Project Manager.
There is no right or wrong answer, simply considerations. Who you choose to own the ESG agenda should ultimately be a factor of:
- Individual experience, passion and bandwidth. Ultimately you need someone who will have the capacity and confidence to take on this agenda.
- Who the main driver for ESG implementation is. Different individuals will likely end up at the helm depending on whether the inception of an ESG programme was demanded by the Board, prompted by regulatory change, inspired by customer feedback, or instigated by staff.
- The priority ESG themes. Should you decide to start on the D&I front, the People function is well placed to advance social ESG topics as part of their day-to-day role, while Operations or Finance are closest to the data needed to calculate carbon footprint. Strategy or Marketing can also be great homes for ESG as transversal functions.
Ultimately, the role of the owner is one of orchestration, coordination and communication. This remains true as the company grows and appoints a full- or part-time head of sustainability. We like this Deloitte report that describes chief sustainability officers as “sense-makers in chief” - because there is a lot of noise and distraction, of hype and jargon. But ESG is common sense.

Convening a working group. Copy link

Under the leadership of the designated owner, a working group can be a great idea to tap into staff passion, discretionary time and effort, and sometimes even uncover relevant experience and expertise from previous roles to leverage. A working group is a great vehicle to ramp up capacity around the agenda while also cascading ESG down the different functions and across the whole business.

Role of the Board Copy link

Getting your Board on board with ESG Copy link

The Board is ultimately responsible for overseeing a company’s ESG risks and strategy. Some leadership teams will be asked by their Board to start working on ESG. Others may find the need to introduce the topic and contextualise its importance. Great ways of doing that include:
- Reinforcing the business case
- Feedback from employees, customers and other relevant stakeholders
- Looking at what your competitors are doing
- Exploring the ESG related challenges the larger, more mature businesses in your or adjacent sectors are facing

Making ESG a regular Board agenda item helps to:
- Receive direction, support and challenge from the Board
- Pre-empt risks and opportunities more effectively, and
- Signal company commitment to ESG

As the company grows, ensuring that the board has sufficient experience and capabilities to take on this responsibility will be critical. Board ESG upskilling can be achieved through enrolling in an ESG training course, using a consultant, or recruiting a new director or board observer with ESG experience.

Without forgetting that an effective Board is integral to strong governance. This requires a Board that is unafraid of healthy debate and tackling uncomfortable conversations, and whose members can bring experience to the table and help handle tough situations.

Boards of listed and large private companies are increasingly subject to diversity and climate-related regulation in their composition and oversight responsibilities, respectively:

Board diversity

By 2026, EU companies listed on the EU stock exchanges will need to have 40% of the underrepresented sex among non-executive directors or 33% among all directors under EU law.
For UK listed companies, 40% of the board should be women, at least one of the senior board positions (Chair, CEO, CFO or Senior Independent Director (SID)) should be a woman, and at least one member of the board should be from an ethnic minority background excluding white ethnic groups (as set out in categories used by the Office for National Statistics).
Additionally, disclosures on Boardroom diversity are increasingly mandated by investors.

Board oversight of climate risks and opportunities

The Taskforce on Financial Related Disclosures (TCFD) was developed to bring more transparency and consistency in how organisations take account of climate-related financial risk exposures
TCFD disclosure guidelines comprise four pillars, starting with governance. Companies who fall in scope of TCFD reporting are required to disclose the organisation’s governance around climate-related risks and opportunities, which includes explaining the board’s oversight of climate change.
While TCFD initially emerged as voluntary recommendations, it is now actively shaping the climate risk regulatory framework. The UK is mandating TCFD-aligned disclosures for listed companies, large private companies, and all financial services firms by 2025, with the EU expected to follow.

Goal setting, measuring and reporting Copy link

Setting clear goals Copy link

Equipped with a clear ESG framework, it’s time to set goals and turn ambition into action. Sequencing the work based on existing knowledge, bandwidth and budget, will help establish what can be done immediately (“quick wins”), what can be done in the medium term and what is a longer-term goal.

An OKR (objectives and key results) framework lends itself well to ESG goals and action plan:

They allow you to dream big (the Objectives) while simultaneously having a tangible plan of action (the Key Results) - which lends itself particularly well to the topic of sustainability.
They bring transparency and create greater accountability and collaboration across the organisation - tying your ESG OKRs back to your firm-wide OKRs signals the strategic importance of sustainability and helps build alignment and whole-of-firm effort toward ESG goals.
They have a regular reporting cadence (quarterly, bi-annually or annually, depending on the business) - creating the transparency and accountability mechanism required to maintain momentum and ensure ESG doesn't fall by the wayside.

Why measure ESG performance Copy link

“You can't improve what you don't measure” holds partially true when it comes to ESG. While there are undoubtedly things that can be done in the absence of measurement (e.g. hire more diverse candidates, publish new policies), the tracking of ESG metrics are instrumental in helping you gain insight into your ESG performance, track progress, prioritise action, support your reporting obligations, and tell your ESG story.

ESG metrics quantify and enable the measurement of progress towards ESG goals. This is necessary for the following reasons:

Tangibility of commitments: Without ESG metrics, your verbal commitments can’t be grounded in any data. This can often lead to big promises without any accountability.
Optimising what you measure: If you aren’t keeping track of the numbers, it can be difficult to know if you are making progress or not. You won’t be able to decide If you need to adjust if you have nothing to base the decision on.
Transparency against progress: ESG involves many stakeholders including the public, investors, governments, and business partners. These stakeholders want to see accurate reports including details of ESG metrics so that they can evaluate your company's ESG initiatives.

What to measure Copy link

The choice of metrics by which you’ll measure and report on your ESG performance should:

Be proportionate with where your organisation’s level of ESG maturity - better to report well on ten metrics to start with and build out your ESG scorecard over time

Be strategically relevant to your business - your metrics should be directly aligned to your ESG framework and strategic objectives

Cover “expected” KPIs - these are at a minimum typically around team diversity and carbon footprint. You can leverage additional sources to establish what this base should be, such as:
- The ESG_VC framework, designed to provide an entry to ESG scoring, comprising 48 measures against ESG objectives. The framework can be implemented from Seed to Growth stage, across companies spanning B2B and B2C sectors, resulting in a tangible ESG score benchmarked against other framework users. The framework can be downloaded for free from the ESG_VC website.
- Your investors’ ESG data requests: VCs and PEs are rapidly rolling out ESG data collection exercises to their portfolio, driven by their sustainability beliefs and commitments, as well as their own investors' transparency and reporting requirements.
- The Future Fit Business benchmark, another good resource offering a library of goals and KPIs, organised around “breakeven goals” (minimum actions) an “positive pursuits” (above and beyond).

Reporting on ESG performance Copy link

Reporting on your ESG performance does not necessarily mean publishing a full sustainability report. A two-pager is a great way to get started.

At its core, a sustainability report should:

Reiterate leadership commitment to sustainability
Tell your ESG story for the year
Report on key ESG metrics
Signal priorities for the coming year

Your ESG policy or framework provides the ideal organising structure for the report, and many companies will include it upfront to frame the report.

Need some inspiration? Read our sustainable future goals report.

1. Reiterate leadership commitment Copy link

Open the report with a statement from your founder or CEO, reflecting on the year’s sustainability achievement and tying it back to overall business development and performance

2. Tell your ESG story for the year Copy link

This retrospective on your company’s sustainability efforts and achievements should cover:

What were some of the year’s key milestones and events
What has been achieved
What is still work in progress
Any setbacks you’ve encountered and how you’re managing them

Transparency and humility are key here, bearing in mind that sustainability is a never-ending journey, with many wins – small and big – to celebrate along the way.

3. Report on key ESG metrics Copy link

Leave sufficient time to do the data collection exercise required to report on your ESG metrics. Aim for the process to become more and more efficient with every annual reporting cycle.

A summary infographic page can be a visually compelling way to communicate your progress. Year-on-year trend reporting is also a very compelling way to tell your ESG maturity story through data.

4. Signal priorities for the coming year Copy link

Within each individual section or in a closing section of the report, it is good to signpost intentions and priorities for the coming year (which will have started by the time the report gets out). If you are setting OKRs/ targets for the year, here is the place to announce them.

Before and throughout developing your report, always remind yourself of your target audience. Who are they and what will they expect to see. You could start with an internal sustainability report for your staff and Board members only.

See for example Brigad’s 2023 Mission report.

"This first mission report is another brick laid along the pathway of our ambition; it is a desire to bring to fruition everything we work for every day, to make it visible and measurable. Much like a compass, it should help us to never lose sight of our direction and to continue developing a sustainable and responsible solution that is at the service of our users." Florent Malbranche, Co-Founder and CEO at Brigad.

Integrated reporting is the side-by-side reporting of financial and non-financial data. It demonstrates integrated thinking of the relationship between financial and non-financial factors that determine a company's performance and of how a company creates sustainable value in the longer term.

See for example H&M’s integrated annual report 2021 describing integrating their annual and sustainability report as “an important step and a natural development since sustainability is an integral part of our business”.

Communicating Copy link

Why it's important Copy link

The lack of a dedicated person looking after communications and a fear of greenwashing allegations are the two main reasons why start-ups don’t communicate on their ESG thinking and actions early on.

However, this is a missed opportunity. Signalling awareness, commitment and intent can go a long way in kicking off your ESG journey.

Communicating early helps:

Articulate a shared definition and vision of what ESG means to your company, making it more tangible and relatable for your team
Earn the respect and trust of your customers and wider stakeholder groups as you communicate with humility and care
Hold you accountable to your stakeholders and likely drive more rapid progress
Create opportunities for knowledge sharing and collaboration with other start-ups and the wider ecosystem
Make ESG part of your start-up story and brand awareness work from the get-go

See this GSK report as an example of how even large corporations are communicating on sustainability through a language of “journey sharing” and “learning out loud”.

“So here we are setting out where we are on our journey. The headline is: we are making good progress against our goals. But it has not always been easy, and there are areas where we need to accelerate action. So, we’re also sharing some of the challenges that we have faced and the lessons we have learnt along the way.” Emma Walmsley, CEO at GSK.

How to get started Copy link

Communicating on ESG should always be based on principles of integrity and transparency. There is nothing wrong in acknowledging that this is work in progress, so long as you have a plan to translate your promises into action.

Start with internal communication:
- A founder or CEO statement sharing their vision of why ESG is important, what do they see as immediate priorities vs. longer-term ambitions for their business, and what they expect of everyone in contributing to the delivery.
This could then be turned into an externally facing blog article for your website
Incorporate principles of sustainability in company values
Build a dedicated page of your website, outlining the crux of your ESG policy

Purpose encompasses what is often also known as mission or vision statements, which are often ill-defined and for start-ups often not useful. Talking about purpose instead gives a clear sense of direction and forms part of the “North Star” that every start-up should have at some point.

For more on this, see:

Start-ups - the one sentence you need to grow - Sifted
Operationalising purpose - Obvious

Greenwashing—the term referring to businesses exaggerating their commitment to and actions towards sustainability—is now firmly rooted in our modern-day lexicon. The EU is cracking down on greenwashing with the imminent roll-out of a new Directive on Green Claims to put greater controls on how companies substantiate and communicate their green claims. The proposed rules will require brands to back up any eco-marketing with robust and verified evidence, or risk fines of at least 4 percent of revenue.
While this is a welcome development in support of meaningful climate action, it is likely to accelerate the observed growing trend of “greenhushing”.
Greenhushing refers to companies purposely keeping quiet about their sustainability goals, even if they are well-intentioned or plausible, for fear of being labelled greenwashers.The main downside of greenhushing is possibly one of stalling progress, as publishing green actions has the power to inspire others, shift mindsets, and encourage collaborative approaches.
So striking a balance between greenwashing and greenhushing is paramount.
This is particularly true of the many start-ups we speak to and who feel that they haven’t done enough and would rather continue advancing on their sustainability journey than talking about it.

We loved reading What is ‘green hushing’? The new negative sustainability trend, explained - Fast Company.