Sustainability is no doubt the keyword taking over the corporate landscape in recent years. From startups developing crucial innovations in clean energy to investors pouring capital into firms creating sustainable food solutions, businesses all over the world are now incorporating environmental considerations to their practices.
In a new report by Colorado-based seed accelerator Techstars, the firm identifies some of the major trends that are happening within the sustainability business space and what opportunities and challenges startups, investors, corporations are now facing using data from its accelerator programs and additional insights from over 50 industry leaders. Below, we some up some of the main findings of the report.
1. Investment is pouring into startups looking to create sustainable food solutions
While waste, resource-use and pollution from our food production and supply chain might not be as obvious to the naked eye as smoke billowing out of an industrial factory, this industry is one of the biggest emitters of carbon dioxide and contributors to global heating. And investors are now taking note of this. According to the report, companies that are innovating solutions to our broken food system are seeing the highest volume of investment activity at Techstars. The majority of the funding stemmed from the Farm to Fork accelerator program in 2019.
2. Startups improving our built environment are also seeing capital injections
Money is also flowing into startups developing ways to improve our built environment, from leveraging sensor networks to track our global pulse to using satellites to visualise new ways to incorporate green spaces into our cities. The report finds that this sector represents the next highest volume of investment activity after food-focused companies.
3. Overall, the number of sustainable startups are growing
Techstars is seeing a major uptick when it comes to the number of companies that are looking to make an environmental impact as the climate crisis continues to intensify. Overall, sustainability-related startups now make up 10% of the total application volume for the firm’s prestigious accelerator programs, a jump from the 4% recorded just a few years ago in 2017.
4. Intersectional environmentalism is going to be one of the biggest trends
The two “biggest stories” to emerge from 2020 are the coronavirus crisis and the Black Lives Matter movement, says the report. Combining these two themes, analysts believe that there is now a strong consensus that sustainability can no longer be “done in isolation” and must incorporate all the interrelated elements in society, from public health to social justice. This means that companies can no longer position themselves as purely climate change focused, for example, without considering how tackling inequality factors into their agenda.
5. Momentum in the EV industry is picking up fast
In 2019, the number of electric vehicles (EVs) on the roads reached 7.2 million. While this pales in comparison to the estimated 1.4 billion total cars, this growth in EVs represents a 40% increase year-on-year. According to the report, this momentum is likely to keep building as the market goes mainstream with battery prices decreasing, charging stations increasing and more types of EVs entering the market, from motorcycles to trucks.
Lead image courtesy of Bloomberg.