How to build a sustainable startup

Caroline Thalund
Jan 30
4 min read

A step-by-step guide to integrating ESG from day one

Welcome back to the second part of our series on integrating sustainability into your startup. In Part 1, we explored the importance of ESG and the benefits of starting early. Now, let's dive into practical strategies to build a sustainable business from the ground up.

Step # 1: Integrate ESG into your decision-making and define your goals

Start by embedding ESG considerations into your decision-making process from day one.

If you're an early-stage startup (1–2 person team), use a simple checklist for key decisions – product, finances, marketing, and ESG – to ensure you're considering sustainability impacts.

If you're further along, add ESG as a standing item in your leadership meetings. Define your purpose, mission, and vision, including the role sustainability plays, to guide decisions and attract customers and partners. Set measurable targets and regularly review your progress on sustainability metrics to keep it a top priority.

Instead of attempting to address every aspect of sustainability, focus on what's most material to your specific business model and industry.

If your carbon footprint will be significant or climate action is a top concern for key stakeholders, prioritise resource-efficient strategies to reduce emissions. Start with quick wins: energy-efficient lighting, minimising waste, conserving water, or moving to cloud-based solutions to reduce paper use.

If you're a remote-first tech startup with a minimal physical footprint, prioritising social factors like diversity, equity, and inclusion (DEI) may have more meaningful impact than focusing on emissions.

For fintech startups, governance issues like data security and customer privacy might be more critical, aligning with industry regulations and enhancing stakeholder trust.

Tools to help:

For startups in well-defined sectors (extractives, manufacturing, finance, tech, infrastructure, healthcare), the SASB Materiality Finder is an excellent resource for identifying industry-specific sustainability risks.

If your focus extends beyond financial materiality, the B Corp Impact Assessment is a fantastic free tool. By answering a series of questions, you'll receive a dashboard view of your strengths and weaknesses, benchmarked against peers in your size and industry.

"The most common thing I hear from startups is how overwhelmed they feel trying to address every possible ESG issue. I always stress that they should focus on the actions that will drive cost savings or open up new opportunities, rather than trying to do everything at once." — Harriet Dwyer, Airtree

Step # 2: Optimise for quick wins that align with your material issues

Once you've identified your material ESG priorities, focus on areas where you can make an immediate impact while driving cost savings or operational efficiencies.

Tech companies can optimise their digital infrastructure by choosing sustainable cloud providers or refining their code to reduce server loads. A SaaS business may find efficiencies through sustainable software practices, while a consumer-facing startup might benefit from aligning with ethical suppliers to enhance brand reputation.

Early-stage startups can leverage the sustainability credentials of suppliers and partners who already have strong ESG practices. This accelerates your sustainability goals and reduces the operational burden of building everything from scratch.

"We've seen companies find practical examples of reducing emissions through engineering that just make good business sense, as well as being great for the environment." — Kate Glazebrook, Blackbird

Step # 3: Ask questions

One of the most powerful yet underutilised strategies is simply asking questions – both internally and externally.

While working with a global SaaS provider, I asked a simple question: in which countries was their data hosted? Since data centres rely heavily on electricity, and the carbon footprint of that electricity varies by country due to differences in renewable energy on their grids, it's an important consideration.

A few weeks later, unprompted, they came back with a review of their data storage practices. Not only had they investigated the issue, but they also proposed a plan to optimise their data storage by moving more of it to renewable-powered data centres.

This approach works particularly well with suppliers. Asking them about their sustainability efforts – whether it's cloud hosting, equipment, or office supplies – can drive real change. Similarly, involving customers in your sustainability journey helps align your actions with their values, fostering trust and loyalty.

The more we ask these questions, the more we push for positive change across the board. A single question can have a ripple effect.

Step # 4: Engage with your community

Share your sustainability journey with your customers and community. Authentic engagement can build brand loyalty and attract a supportive network.

Share regular updates on social media, similar to how Allbirds publishes their carbon footprint progress or how Ben & Jerry's engages their audience on social justice and climate initiatives.

Involve your customers in feedback surveys, like Atlassian, which shares sustainability reports and invites users to contribute ideas on reducing their environmental impact.

Being transparent about your challenges and celebrating small wins can turn your community into active supporters who are invested in your journey toward improvement.

Step # 5: Track and communicate progress

Focus on a few key metrics that are easy to measure and communicate. Fuel use from company-owned or leased vehicles, factory use, and electricity are the easiest to get hold of and are essential starting points.

Transparency is critical – not just in celebrating successes, but also in acknowledging where there's still room for improvement. Rather than trying to present a perfect image, being honest about your sustainability journey builds trust and sets you apart from competitors.

If your business depends on fossil fuels, don't shy away from that reality. Acknowledge it while emphasising your commitment to gradual, meaningful change.

Step # 6: Leverage technology

Investing in affordable ESG solutions can streamline data collection, track progress, and automate reporting, while building internal capabilities with expert guidance along the way. This is particularly beneficial for startups with limited resources, enabling them to manage sustainability initiatives without overstretching their teams.

Even among large, mature companies, 47% still rely on spreadsheets to manage sustainability data – an approach that is both time-consuming and prone to errors (KPMG 2024 Sustainability Organisation Survey).

What's next

In Part 3, I'll address real questions from founders and provide practical advice on integrating ESG with limited resources.

Want to make sustainability part of your business?

S360 offers software, AI tools, learning, and expert support to help you get it done – with packages designed for SME budgets. Explore our solutions →