Investors who are looking to invest in start-ups early on are now preferring those that focus on sustainability, according to a study conducted by FTI Consulting on behalf of Amazon. The study surveyed 509 institutional or private investors from Great Britain, France, Germany, Italy, and Spain in April 2023, and found out that more than 100 investors in each country participated. Compared to the previous year’s numbers, the figures were slightly lower, but Amazon explained that these slight deviations still fall within the error margin of such studies.
German investors rejected investment in a start-up more frequently (58 percent), more than investors from other markets, due to concerns about ecological sustainability, which speaks for a continued high level of interest in sustainability. In addition, 70 percent of the German investors surveyed have asked for more information about the sustainability of the start-ups in which they want to invest in the past 12 months, due to both personal convictions and the sustainability commitments of their own companies.
According to German venture capital and private equity investors, start-ups that focus on sustainability achieved a valuation premium of 13 percent this year, compared to 15.9 percent in 2022. However, the score can drop by up to five percent this year if startups have a poor sustainability record. In the past months, 58 percent of German investors rejected investments in a start-up due to concerns about the company’s verifiable sustainability record, and 77 percent stated that start-ups need more support to anchor more sustainable operations.
Amazon has its own program for promoting start-ups, the “Sustainability Accelerator,” which has been active since last year. 1300 start-ups applied in 2022, and 12 were funded, two of which came from Germany. Amazon has now announced the names of 16 start-ups that will be funded in the second round of the Sustainability Accelerator, four of which come from Germany. The program is designed to help scale companies and develop innovative technologies and more sustainable products, with mentoring, networking, and financial support available.
The selected start-ups will receive an equity-free grant of EUR 12,000 and AWS credits worth USD 25,000, and Amazon offices in Berlin and London can also be used free of charge. Start-ups in the consumer goods sector also receive free access to Amazon Launchpad for one year. The program will end with the opportunity to present one’s own start-up to a broader audience of experienced investors.
While Amazon is promoting more sustainability with the Sustainability Accelerator program, its own climate balance does not look good at the moment. Although the company wants to be climate-neutral by 2040, CO2 emissions have increased in recent years. While the equivalent of 51.17 million tons of carbon dioxide was emitted in 2019, by 2020 it was already 60.64 million tons. In 2021 there was an increase of 18 percent to 71.54 million tons.