At Techstars we get asked all the time “If you could recommend just one ESG action to a founder at a very early-stage company, what would it be?”
Without a doubt, we recommend that the most powerful single action is to find an ESG advisor or mentor for your company. The ESG landscape is constantly evolving with new ESG risks emerging and possibly blindsiding founders who are heads down on building their company without the bandwidth to scan the ESG landscape for changes. Having an expert on ESG risks assist your company can help you proactively get ahead of ESG risks and avoid damaging ESG mistakes that could impact your company’s ability to create long-term value. For example, if you are a company that builds AI tools for elementary school educators to help them increase the literacy scores of their students, data privacy will impact your bottom line. Poor data privacy puts your company at serious risk. Another example is if your supply chain involves a vendor located in an area with repeated wildfire risk, your supply chain may be disrupted by climate events and it is critical you have a backup plan or otherwise adjust for this risk. Beyond helping founders to avoid or mitigate these real risks for their company, an ESG advisor can also support founders who are preparing for ESG conversations with investors or with their own board.
At Techstars we believe ESG applies to all companies, regardless of sector or vertical. ESG is about managing systemic risks, avoiding creating unintentional harm, and building resilient long-term value. Every company is embedded in society and in the environment - no company operates in a vacuum. Therefore, every company is impacted by society (think: regulations or ethics) and the environment (think: climate risks in a supply chain). Like it or not, every company impacts both society and the environment either intentionally or unintentionally in either positive or negative ways. To navigate these waters, we believe a powerful first “ESG action” for every company is to find an advisor or mentor that can help founders monitor and anticipate ESG risks and opportunities within the company operations.
What could you look for in an ESG Advisor or mentor?
Experience in an ESG role at a public company (because the public company ESG ecosystem is more mature) or an ESG role at a startup that has scaled.
Experience with ESG reporting or ESG-style company certifications like Fair Trade or B Corp certification.
Experience with an ESG topic that is highly relevant for your company like DEI, data privacy, or carbon footprinting.
Qualifications listed on their LinkedIn profile include Foundations of Sustainability Accounting (FSA) I & II, Global Reporting Initiative (GRI), Taskforce for Climate-Related Financial Disclosures (TCFD) courses, or other ESG reporting frameworks.