European investors reward startups with a firm commitment to sustainability—with more than half declining a startup investment opportunity in the last 12 months due to concerns about a company’s sustainability credentials, a market study commissioned by Amazon has found.
- In the past 12 months, more than two-thirds of investors (71%) have requested more details about the sustainability credentials of startups they are investing in, citing personal values and their own organisation’s ESG (environmental, sustainability and governance) commitments as the driving factors.
- More than half (52%) of investors have declined a startup investment opportunity in the last 12 months due to concerns about a company’s sustainability credentials.
- When asked about what startups are lacking, investors cited concerns about the sustainability of their logistics throughout the supply chain and responsible waste management processes.
- This research comes as Amazon and EIT Climate-KIC, Europe’s leading climate innovation hub, and WRAP, a leading UK climate action NGO, announce the 16 startups joining the second edition of the Amazon Sustainability Accelerator, following more than 1,500 applications.
The Overview: Early-stage investors are rewarding startups with strong sustainability credentials. European venture capital and private equity investors say those companies can command a 15% valuation premium, demonstrating the opportunity for entrepreneurs who are building more sustainable products and businesses.
- Startups with a poor sustainability track record could see their valuation reduce by up to 8%.
- Seven in 10 also say the volume of current and upcoming ESG regulation is deterring them from investing in startups focused on sustainability.
- To take the next step, the vast majority of investors (84%) say startups need better support to embed environmentally-sustainable practices, and 81% say that over half of startups they see lack the right technology and know-how to operate more sustainably.
Amazon Sustainability Accelerator: Among those selected, are:
- Infinite Athletica (ES): a circular sportswear company turning sport waste into garments for the same sport;
- Induo (FR): a textile recycling technology company turning used textiles into brand new apparel;
- Polyperception (BE): a platform providing real-time, end-to-end waste flow monitoring to plastics and material recovery facilities;
- Terrawaste (NL): a chemical recycling technology turning non-recyclable dry, wet and mixed plastic waste into valuable, carbon-negative materials;
- Matoha (UK): material identification devices that help with efficient waste sorting;
- Sorted (UK): AI-powered solutions to help waste management companies sort their recyclable materials;
- Papair (DE): recycled paper bubble wrap providing a sustainable packaging alternative to conventional bubble wrap; and
- We Do Solar (DE): a smart solar set that can be installed in balconies.