Should environmental impact be an integral part of startup pitches and plans?

Traditionally, startup pitches start with a problem or opportunity, propose a solution, then go straight into the market, growth potential, financials and investment opportunity. Nowhere is there a discussion of climate or environmental impact. Should there be?

The United Nations IPCC report released in October 2018 announced that "we have 12 years to limit climate change catastrophe". This dire prediction is backed by credible studies in the US and Canada, as well as elsewhere. We can no longer do things the old way.

Startups start with a clean sheet, building a new offer, a new team and a new infrastructure to match an unmet need. However when we coach new businesses, we urge them to focus their message on raising money, as if we were stuck in the mid-2000s before Al Gore’s “An Inconvenient Truth”. Nowhere in pitch deck models do we mention environmental impact. What should be the responsibility of Founders on this very important topic? What should Funders do to encourage business models which acknowledge this inescapable predicament? Or is it something that we’ll deal with later if the business lasts beyond seed stage? The problem is that if environmental impact is not addressed from the start, like a path to profitability, we risk never getting around to dealing with it. And by then, it’s too late.

Startups launching today (2019-2020) will quickly face volatile economic, political and climatic changes - all caused by the environmental challenge. This uncertainty is probably the biggest risk for any Founder or Funder.

The flip side is that with uncertainty comes opportunity. Value innovation focusing on increasing utility while reducing all costs, and not just externalizing them to other stakeholders or to the commons (a la Uber), will be the key to long-term business success.

Environmental impact needs to be a foundational part of the startup business model starting now. All this entrepreneurial energy should not be limited to just creating value for customers and valuation for investors. If we're going to make capitalism better, our activities must also price the impact on our valuable and life-sustaining commons. 

So when are we going to see Demo Days scored not just on growth potential but also on how they address environmental impact?

Davender empowers growth-focused entrepreneurs to thrive in an unpredictable world. Is is the founder of The Scaleup Project, a consultancy helping startups to mature into sustainable and profitable businesses. He is also a co-founder of the Defi Croissance Montreal Growth Challenge and a TEC Canada Chair for emerging businesses. https://TheScaleupProject.com