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Incorporating ESG initiatives from the ground up – A game-changer for startups

To avoid reducing ESG initiatives to a feel-good exercise and create strategic value for startup and scale-ups the choice of trusted partners committed to this approach is also key…

Incorporating ESG initiatives from the ground up – A game-changer for startups

By The Nest by Webhelp, 21 April 2021

ESG (Environmental, Social, and Governance) initiatives are created using different elements that measure the sustainability and societal impact of an investment in a company or business. These roles of course can differ based on the industry and startup.

In order to create strategic value for ESG initiatives, companies can partner with a trusted advisor that is committed to an honest approach to measure sustainability and societal impact. Too often ESG initiatives can be done as a feel-good exercise or even in an attempt to “good-wash” a business. An experienced partner can be used in addition to a wide range of initiatives related to a company’s core business.

We will detail why incorporating ESG initiatives from the ground up for a young company is key for its future growth and how The Nest, through the impact sourcing programs set up by Webhelp, can be a key partner to support startups’ growth in this context.

ESG_The Nest

Environmental initiatives can vary from carbon emissions, energy consumption or food/material waste and product packaging. It encompasses the whole product and customer journey, from start to finish.
Social relates to diversity, equity and inclusion, ethically or sustainably sourced products. Failure to comply or implement the right policies can create serious backlash, regulatory penalties and in some cases, devalue businesses.
Governance can refer to a company’s culture, structure, policies, procedures and data protection. Employee retention, engagement and satisfaction, all indicate whether a company is complying and upholding ethical standards, which is key for many investors.

“The 19th century investors focused on returns, in the 20th century investors focused on risks and returns and, in the 21st century, the conversation has shifted to risk, return and impact.”

World Economic Forum participant, 2015
Incorporating ESG from the ground up The Nest

Incorporating ESG principles from the get-go is a game-changer for startups and a catalyst for growth, here’s why

Investment opportunities

  • ESG initiatives are no longer an asset class, but a mindset and companies now adopt it as part of their ethos. 2020 saw a boom in ESG and impact investments as more VC and private equity players entered the market, joining key European investors such as Investir &+, Norrsken V, Nysno or Impact X etc. For the latter, financial and impact business plans go hand in hand and the remuneration of company executives and investors depends on both objectives.
  • Morningstar data showed “global assets in sustainable funds hit £930bn in the third quarter of 2020, a record high.”1 , while total capital invested in purpose-driven tech companies reached around $6B in 2020 (compared to $1.9B in 2016)2.
     
  • We live in a world where people are more conscious of their buying power, where they are spending their money and where they want to invest. Morgan Stanley survey found that “86% of millennials are interested in sustainable investing, pursuing investments that more closely reflect the values they hold.”3

Talent acquisition

  • Today’s workforce has mobilized ESG. People are looking for a job or career that has a meaning and purpose – motivation to make changes and positively impact the world. Therefore, companies with purpose and strong ESG policies are considerably more attractive for new talents and increase their employee retention, loyalty, and productivity.

Up to 50% reduction company’s turnover rate
Up to 13% increase in employee’s productivity

Reached by companies implementing strong CR commitment according to the research conducted by Project ROI
The Nest_talent ESG

Cost reduction

  • ESG principles embedded into a company can support every-day conscious decision-making, personally and as a company which can result in saving on operational costs in the long- run. For example: reducing carbon footprint with cycle to work schemes, use of office materials, packaging, energy efficiency and water usage etc.
  • Compared to 15 years ago, the service offer to increase your positive ESG impact as a startup was limited. Today however, there are numerous solutions that are available and many young companies (from search engines (Qwant, Lilo.org) to second-hand electronics and circular economy players (Zack, Backmarket, Recommerce) which can help you change our impact completely even through small daily actions.

Check-out >> this very interesting article from Serena Capital blog << to know more about existing alternative suppliers and super helpful tools to increase your positive ESG impact!

  • Most of them are part of the Tech for Good movement, bridging the gap between technology and social change, and bringing together a community of people, organizations, and investors. In France, there are over 500 Tech for Good startups, and in 2018 there were over 490 Tech for Good companies in the United Kingdom, valued at over £2.3 billion.

Risk mitigation

  • McKinsey’s research3 has shown that a strong ESG proposition can achieve great strategic freedom and ease regulatory pressure . Startups could be more exposed to the risk of regulatory compliance without the right knowledge and rudimentary ESG principles in place from the beginning. This could mean they get left behind if they are not careful.

Credibility and competitive advantage

  • Of course, starting from the ground up with ESG principles at the forefront of a brand sets businesses apart and, in many ways, shapes their USP. Consumers are shaping the future of what brands have to offer. Quite simply, they want a product with a positive impact.
  • 73% of global consumers say they would probably change their consumption habits to reduce their impact on the environment4. Everyone does it differently but establishing these principles from the beginning can give credibility and positive recognition to gain a competitive advantage and grow in the market.

Impact sourcing for startups and scale-ups

Impact sourcing relates to socially responsible outsourcing as it provides disadvantaged workers from low employment areas with career opportunities that otherwise have limited access before, through outsourcing or working remotely.

Several developing countries have adopted AI and technology eco-systems to transform businesses across the world. For example, in the year 2019, tech hubs across the African continent grew by 50%, with no sign of slowing down. These growing tech hubs provide a crucial role in employment opportunities and lifting communities.

As tech hubs are growing across the continent, this makes it very attractive for startups and blue-chip companies to work with emerging talents in this vibrant economy from around the world. This provides workers with access to higher-income employment and skills development – shifting from micro-tasks to software outsourcing. Setting new strides in how ESG impacts human resourcing.

At Webhelp we have been building successful partnerships through impact sourcing. Here are a few of our initiatives across the world…

…In South Africa

  • In SA, the youth unemployment rate is about 69% (15-35yrs), which is a discernible societal issue.
  • Webhelp SA has partners with Harambee & Columba University. They form a business initiative aimed at providing employers with access to a broad labour pool of unemployed youth who have not had exposure to sustainable employment opportunities in the formal economy and provide work-readiness (also called “bridging” programmes). We’ve placed more than 800 young people in peak and non-peak activities in 2019.
  • With Harambee Youth Employment Accelerator in South Africa, our remarkable results have seen an incredible impact on loyalty and performance; employee retention is at 90%, and the pass rate for induction training is 100%.

…In Spain

We are partnering with MigraCode, the first code academy for refugees and migrants in Barcelona. The association provides them several months of learning in digital skills. In parallel, if they need to be upskilled in English (a must have to work in our Barcelona office, as all trainings are in English), we partner with Oxford Language School so that our future colleagues get training by professors who need to practice their pedagogical skills.

Migracode

…In Turkey

Webhelp Turkey focuses on long-term unemployed workers through the Turkish Government Employment Office as well as workers with disabilities particularly for Turkish local market.


The Nest by Webhelp shares its mission to ‘Make Business More Human’ through our ESG initiatives which are made up of our 4 cultural pillars: People, Planet, Progress, and our Think Human Foundation. This framework ensures we strive every day to act responsibly, strengthen our communities and business partners to make a positive difference while building a sustainable future.​ You can learn more about these here.

Want to learn more about our impact sourcing and ESG initiatives for your startup? Contact us!

ESG Impact
Implementing ESG principles can provide impactful growth, better retention, loyalty, and performance. It’s not a lost investment, but a sustainable one for your company.
We live in a more conscious world. By joining forces with new partners to support growth, or outsourcing a specific part of your business can help take your brand to the next level. Impact sourcing paves the way for change – to make a difference in local communities and build a better world. At Webhelp Group we do this through our Webhelp World. The heart of our business is the people, our Webhelpers; across our multilingual hubs, they are continuously providing an impactful service with a positive, forward-thinking mindset to strive to do better every single day.

The Nest by Webhelp collaborates with startups to offer support in educating and finding the best solutions to fit business needs. Ensuring compliance and credibility is top of mind, while developing your goals and measuring your progress for sustainable business growth.

1. https://www.ftadviser.com/investments/2020/11/05/esg-inflows-quadruple-in-2020/
2. https://2020.stateofeuropeantech.com/chapter/investments/article/purpose-driven-investments/
3. https://www.mckinsey.com/~/media/McKinsey/Business%20Functions/Strategy%20and%20Corporate%20Finance/Our%20Insights/Five%20ways%20that%20ESG%20creates%20value/Five-ways-that-ESG-creates-value.pdf
4. https://www.nielsen.com/eu/en/insights/article/2019/a-natural-rise-in-sustainability-around-the-world/