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grandstand | Why sustainability can unlock startup investment

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In this column, Kellen O’Connor, Managing Director of Startups at Amazon Web Services (AWS) EMEA, explains why sustainable investments in startups are open and how to better measure your carbon footprint thanks to the cloud in order to attract investors.

Today, the issue of sustainable development is at the heart of everyday decisions, and environmental concerns are at the forefront of discussions. To date, the focus has been on communicating the Sustainable Development Goals (SDGs), implementing strategies as well as investing in carbon emission reduction technologies; Lots of topics dealt with by large companies. However, with so many startups entering the market in recent years, setting sustainability goals from launch has become key to gaining and maintaining market share, even for seed funding.

Multilevel sustainability

Sustainable development thinking, supported by a clear strategy, is now an integral part of any expansion process. Startups that embrace high sustainability standards from their inception, and maintain them throughout their journey, show investors that they are willing to go as far as they can, and finally get out. It is now expected that measures will be taken with regard to sustainable development; These are also an important part of the equation and ensure a better growth curve, from financing to customer acquisition and talent retention. Let’s explore it in detail.

First, financing. Environmental, Social, and Governance (ESG) criteria, a set of standards that measure a company’s impact on society, as well as transparency and accountability, have figured prominently in the startup funding debate. A study by PwC shows that venture capital firms are now incorporating ESG goals into their investment strategy.

Then there’s customer retention, the chords of any business, no matter the size. Sustainability remains a priority in consumer purchasing decisions. It is therefore important to set and communicate clear sustainability goals for retention. For example, many Generation Z consumers, a key audience for many startups, choose sustainable brands and are willing to spend 10% more on sustainable products. Thus, these growing trends present startups with only two options: become sustainable or lose their competitiveness.

Finally, the ability to attract and retain talent. In fact, 86% of employees worldwide would prefer to work for companies that are concerned about the same issues. In today’s fiercely competitive job market, it is important to set boundaries for diversity and sustainability because the best candidates want to work in organizations with a noble purpose. The values ​​that employees expect from employers have changed, with ethics and a culture focused on sustainability now taking center stage.

Better measure your carbon footprint thanks to the cloud

The path to achieving sustainable goals while embarking on entrepreneurship may not be clear to startup founders. How can a startup seeking funding achieve these goals? Technology can answer this question in one word: “the cloud.”

According to a 2021 report by S&P Global Market Intelligence in partnership with Amazon Web Services, moving computing workloads from data centers to the cloud can reduce energy consumption, as well as associated carbon emissions, by about 80%. In addition, the cloud is five times more energy efficient than a typical European data center. So what works for established companies can certainly benefit future businesses.

The AWS Well-Architected Sustainability Pillar provides startups with best practices for designing and managing more sustainable workloads in the cloud. In addition, AWS can also help young companies measure and evaluate their own sustainability performance indicators. Initiatives such as the Customer Carbon Footprint Tool to measure their carbon footprint can help business leaders track and measure their success more accurately and responsibly.

AWS has also developed an ecosystem where you can meet like-minded business leaders and mentors who are facing similar sustainability challenges. All of this can help startups incorporate sustainability into their initial investment attraction planning.

Through programs like the AWS Sustainable Cities Accelerator, startups that develop “green” ideas can showcase innovations that benefit the masses and attract investors. In Europe, sustainability startups raised nearly €15 billion last year. This momentum will continue in 2023 for European companies focused on sustainable development. All companies, whatever their size, must now consider sustainable development as a necessity rather than a luxury, in order to stay afloat and thus achieve the goal of growth.

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