UK Investors are backing a better future.
“Environmental impact is increasingly guiding investment decisions” Amazon’s unveiling of the participants in their Sustainability Accelerator highlights UK investors’ growing interest in purpose-led businesses.
We’re more aware than ever of the impact we have on the planet, so much so that it impacts every decision we make. From the foods we eat to the consumer goods we purchase, there’s now a higher standard to uphold and a purpose that’s driving us to do better and think more consciously.
In the corporate world, investors are looking toward companies that have placed sustainability as an integral part of their business. UK venture capital and private equity investors say that start-ups with strong sustainability credentials can command a 15% valuation premium, whereas startups with a poor sustainability track record could see a 4% depreciation in their valuation. [i]
The Effect Of Amazon’s Sustainability Accelerator
This revelation comes as Amazon reveals the participants of their 2nd annual Sustainability Accelerator. 16 participants have been selected, 8 of which are UK-based. Amazon has displayed a dedication to fostering and investing in sustainable businesses over the past few years, and the continuation of the Sustainability Accelerator in 2023 further validates big businesses’ shift towards sustainability-driven investments.
So, how does this impact your purpose-led business and its ability to secure investment?
Well, over the past 12 months, 81% of investors have requested more in-depth details about the sustainability track record of the startups they are investing in.[ii] This is often driven by their personal values or to protect the ESG commitments of their own organisations. Sustainability credentials are no longer an afterthought for investors, it can now determine whether they view your company as a viable business to keep investing in.
However, without the proper support and know-how, many purpose-led startups can quickly become out of their depth. New ESG regulations mean that more innovation and investment are required to align with environmental standards. Fortunately for the businesses taking part in this year’s accelerator with Amazon, they will be provided with the backing and expertise to effectively practice the values and ethics of their company.
Investment can be difficult for startups to obtain but the access programs like the Accelerator provide to smaller businesses is a premium that’s awarded only to those that focus on environmental change. This premium goes beyond Amazon’s bubble as investors globally are considering a business’s impact data before investing. Despite the challenges and increased cost of running a sustainable business, these companies are considered less of an investment risk and more likely to offer a bigger return in the long run than businesses that don’t cooperate with ESG regulations.
Final Thoughts
Investors have made their feelings clear about what they’d like to see from the companies they invest in. They’d like to see sustainability built into the brand, playing a vital role in every area of the business, and business owners are encouraged to track and report their impact data to their backers.
The brands we support have witnessed a shift in investors’ attitudes over the past few years, noting that the conversations they’re having with potential investors are now more pointed toward investigating the role sustainability plays in the business. They have also noted that the progress they’ve made with Amazon has been included in investor conversations as it acts as a strong source of evidence for product demand.
The opportunities for purpose-led brands are growing rapidly and our aim is to offer our support and expertise as brands navigate the changes that growth on Amazon provides.
Would you like to learn more about what we can do for you and your Amazon business? Schedule an introductory call today.
[i] New startups join the Amazon Sustainability Accelerator (aboutamazon.co.uk)
[ii] New startups join the Amazon Sustainability Accelerator (aboutamazon.co.uk)
