We have certain privileges. We don’t have to wait for policies to be implemented because we can take action ourselves. We don’t have to sit around and wait for other people to come up with the necessary answers because we can create those solutions.
That’s a lot of power. And with that power comes responsibility. We can’t shut our eyes and hope that someone else figures it out. We have to figure it out ourselves – and we are doing so, as evidenced by some of the incredible ESG-friendly startups that are currently thriving.
Many of us got into this business with the grand ideal that we wanted to change the world. This might be the very opportunity that we were waiting for.
The Business Opportunities Of ESG
From an ecological viewpoint, thinking about ESG is absolutely critical to our survival. But from a business standpoint, it’s a big opportunity too. And while some investors have been dragged reluctantly to the ESG table, most that I have spoken to find it a really exciting space in which to play.
The climate crisis affects every single person on this planet. We like to talk about a business’ TAM (“total addressable market”) in our industry. Well, when it comes to the environment and those who will be impacted by it, we are dealing with a TAM of 100% of the world’s population. With such a demographic, it makes sense for investors and founders alike to recognise the business potential here.
But the best entrepreneurs aren’t merely tokenising ESG or adding in a bit of environmentally-conscious-sounding tech just to keep some annoying hippies happy (a practice some refer to as “greenwashing”). They’re taking the best of their innovation and applying it in ingenious ways to create solutions.
This new wave of ESG-friendly startups is showing that tackling the climate crisis and other societal issues isn’t about leading lives of restriction and sacrifice for the benefit of future generations. Quite the opposite. They’re actually offering new and exciting solutions that will improve our lives while benefitting the planet and society too. It’s a classic win-win!
This is the core of ESG and impact investing. We’re not looking for compromises or ways to make a painful situation marginally less painful. We’re looking for forward-thinking solutions that will allow people to enjoy a better way of life whilst also being conscious of their environmental and societal impact. We’re looking for solutions that make us sit up and think: “How did we ever think the old way was better?”
A Whole New World
Perhaps the most exciting part of ESG is its sheer scalability. Good solutions that are socially- and environmentally-friendly are something that consumers want. It isn’t a limiting factor, as some of its detractors claim. In fact, it opens a lot more doors than it closes. Practically everything we do has an effect on the planet – either positive or negative – and, as such, virtually every sector can offer innovative solutions.
This involves obvious sectors such as transport, where environmentally-conscious solutions are nothing new. Our governments have spent decades trying to reduce carbon emissions and make us less reliant on the gasoline that is so destructive to produce, transport, consume. Hybrid and electric vehicles have sprung out of the innovation demanded of us by our governments, and although they’re not yet perfect by any means, particularly given the lithium batteries many of them require, they are undoubtedly a monumental step in the right direction. These vehicles may seem new and innovative now but will surely be omnipresent in a few decades’ time. This is an example that every ESG-facing founder and investor can hope to emulate.
