About this guide Copy link

At Balderton, we believe the best way to change the world is to build a business. Start-ups play an important role in disrupting and redefining the way in which we live, work and operate.

This start-up guide to ESG aims to give early-stage companies the inspiration, confidence and tools to embark on their sustainability journey, today. It covers why it’s important, what to start with and focus on, and how to establish and operationalise ESG in a small, fast-growing business.

We understand that sustainability is not easy. It’s a journey, and we hope this guide can support you along the way.

At a time when the world faces many challenges, the imperative for businesses to grow as thoughtful, fair, inclusive and environmentally responsible organisations has never been more important. As generalist VC investors who have been investing at multiple stages in Europe for over 20 years, we see it both as our opportunity and responsibility to plant the sustainability seed early in all the companies within our portfolio.

Want to learn more about Balderton? Read our ‘About Us’ page.

Intended audience of this ESG guide Copy link

This start-up guide to ESG was written with the founders and CEOs of early stage companies in mind, alongside all the operators and coalitions of the willing who have or want to start thinking about sustainability and impact. While we strongly believe that there are many benefits for organisations to start their sustainability journey early, this guide will also be valuable to growth-stage companies, with checklists included for Pre-seed/Seed, Series A, and Series B+.

We understand that ESG will be a self-taught discipline for many start-ups and scale-ups and have developed this guide with that in mind.

Terminology around ESG Copy link

We acknowledge that the world of corporate sustainability is stifled with definitional debate. We have outlined below our working definitions for the purposes of this guide.

What is ESG? Copy link

In the VC context, ESG refers to the principles of Environmental sustainability, Social responsibility, and robust Governance that should be instilled in a company’s culture and practices. These principles are universal, barring inevitable nuances based on the operating jurisdiction, growth stage, industry and product and business model of a company. These principles and practices are the primary focus of this guide, underpinned by notions of business responsibility and ethics.

While we acknowledge that the term ESG is highly debated, and that “ESG investing” in particular is facing numerous challenges, we believe it remains the most comprehensive, clear and concise way of capturing the three core pillars. It simply requires clear definition in usage.

What is impact? Copy link

In the VC context, impact refers to the external societal influence of a business’ products and services. We are proud to have many companies in our portfolio that were founded as impact-led (or “mission-led”) businesses. We however believe that every business can explore how it can deliver positive societal impact through its core products and services–and encourage them to do so. We explore this further in our final section of this guide, “Going the extra mile”.

To be truly sustainable, a business should seek net positive outcomes through both exemplary ESG practices and net positive product or service impact.

What are the SFGs? Copy link

Balderton’s Sustainable Future Goals (SFGs) is the thematic framework that we’ve developed as a sustainability blueprint for the European start-ups in our portfolio and the wider ecosystem.

We believe that these ten goals cover the key environmental, social and governance themes that every European tech start-up should be aware of and appropriately managing. They were inspired by the United Nation’s Sustainable Development Goals which we commend as a positive framework for shared global action.

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