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Published on: Nov. 15, 2022, 1:07 p.m.
Leveraging a bias for action
  • Creating sustainability does indeed create profitability; Image: Pixabay

By Alankrita Khera. The author is Director, ACT Grants

Anand Mahindra has famously advocated for climate action as the biggest business opportunity of the 21st century. His point of view is deeply corroborated by research that has found that companies that pay active attention to environmental concerns also have the ability to enhance value creation. The thought that’s top of mind for business leaders across the spectrum is that creating sustainability does indeed create profitability.

As investors make climate more central to their decisions, founders and CEOs have begun to understand how, for instance, becoming energy-efficient can decrease costs in the long run or how shifting towards recyclable resources can unlock new market opportunities in the form of customer loyalty.

But while there is an increasing pressure on companies to act on climate change from multiple stakeholders, few have the robust mechanisms and resources to implement their sustainability goals. This is particularly true of start-ups – the fact that they are earlier in the business lifecycle with a dynamic financial situation doesn’t align with the requirements of existing corporate sustainability pledges, which are built for more established businesses with stable operations and profitability.

Start-ups are a major growth engine for India’s economy. Industry sources project 35-65 per cent of economic growth and 100 million+ jobs being created by these businesses by 2030. They are also at the forefront of driving new business best practices that can shape future industry benchmarks of excellence.

The need of the hour is a climate pledge that has a sustainability framework specific to the development cycles and business realities of start-up operations – one that helps them identify climate action goals based on their industry, financial viability and growth trajectory. Such a pledge can future-proof their business from both a risk and opportunity perspective – it will prepare start-ups for SEBI’s BRSR (Business Responsibility and Sustainability Report) compliance at the time of public listing, reduce switching costs when sustainable practices are adopted early and in certain cases, save operating costs as well.

ACT, an Indian non-profit venture philanthropy platform, is pioneering the Green Start-up Pledge (GSP) in collaboration with Boston Consulting Group (BCG) – it’s the world's first climate pledge that’s designed exclusively for start-ups and is an example of India’s leadership in building the green economy.

The pledge is a global public commitment by a start-up to grow both economically as well as ecologically by integrating or transitioning to sustainable business operations – in alignment with the UN’s goal of attaining net-zero emissions by 2050. The framework is designed to be responsive to the dynamic nature of start-up growth and has the ability to be integrated into regular business operations thus ensuring that it’s neither a distraction from core business needs nor demands any extra expenditure.

While start-ups committing to GSP will definitely benefit from frameworks that are flexible, streamlined and aligned with their business operations, what’s truly remarkable about this pledge is the availability of a first-of-its-kind resource platform to support active implementation. 

There is no dearth of carbon accounting and sustainability optimisation tools but not only are these interventions expensive, they are ineffective in helping founders ascertain the best ways to optimise the implementation of their climate action goals. In fact, a recent study by Forrester Consulting found that two in every three businesses in India identify collaboration as critical to achieving their net-zero carbon goals, with 63 per cent of senior leaders articulating the lack of access to peer networks, low awareness of best practices and minimal knowledge of partner organisations as top challenges.

  • Start-ups are a major growth engine for India’s economy. Industry sources project 35-65 per cent of economic growth and 100 million+ jobs being created by these businesses by 2030

This is a big reason why ACT is uniquely positioned to champion the idea of a climate pledge specifically tailored for start-ups. The org deeply believes that founders who build successful businesses can also build the foundations for a better world but also that collective action has the power to create impact at scale.

Instead of placing the weight of the responsibility entirely on start-ups themselves, the Green Start-up Pledge aims to not only streamline reporting but also create a trusted repository of tools, resources, reputable vendors, best peer practices as well as plug and play solutions that can aid compliance with the aim of building better from the beginning or transitioning economically. 

With BCG as a partner to the initiative, adding the full weight of their deep industry and functional expertise behind the framework design & progress monitoring, GSP is a truly collaborative effort to help start-ups gain sustainable competitive advantage while combating the biggest crisis of our time.

The pledge is being launched at UNFCCC COP27 at Sharm El-Sheikh in Egypt as well as at the Bangalore Tech Summit in India with the Chief Minister of Karnataka – with many leading start-ups like Zomato and Zerodha already having pledged their participation.

Says Deepinder Goyal, Founder – Zomato: “Climate may not be top of mind when building a high-growth business, but it is increasingly important. Sustainability can have significant business benefits – with customers, employees, investors, on the bottom line and for the planet. Zomato has already taken pioneering steps in this direction and we are excited about the GSP because it helps start-ups incorporate sustainability into core business operations in a way that builds better and delivers business results.”

But while the pledge is in gear with Indian start-ups, ACT aims to scale it globally with start-ups from around the world. With a rolling three-year plan which empowers start-ups to set self-defined goals and enables exclusive access to experts & playbooks, the bold ambition is to rally the start-up community around climate action in a truly sustainable way.

As business leaders, a bias for action is our best hope of creating a better, greener world – it will be our legacy for the generations to come.

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