Feb 1, 2024 – Decarbonization for startups and venture portfolios is stuck in first gear.

It’s not clear what responsibility or impact a startup can have on climate, let alone how to intertwine a climate strategy with an existing product and gtm strategy.

If you’ve felt this way, you’re not alone.

Existing decarbonization frameworks are scientifically rigorous, but extremely dense and hard to adopt. They also do not make the business value of decarbonization clear.

But this is dangerous.

Little companies become big companies in the blink of an eye and today’s startups will be the next entrants to the S&P 500 later this decade.

Given this, startups have the potential to have the largest carbon footprints like today’s S&P 500 or the most impressive net zero operations, like winning companies of the future will have.

Startups, rightly so, see themselves as the future. And if we decidedly need a low carbon future, then an onramp is needed for startups to “build it in from the beginning” – both demystifying decarbonization and showing how it can be a lever for company growth.

In that spirit, below are a few excerpts from the True Ventures Climate Action Guide, which I co-authored with True VP Priscilla Tyler. It’s a simple framework built specifically for startups to help founders and their teams get in the game.

Let's take a look at a few exceerpts:
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Iterative Carbon Plan
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‍Large enterprises and governments have an incessant focus on reaching net zero. This is in part because the biggest contributors to global GHG emissions require a complete plan to make a real dent in reducing them, in part because they have ESG compliance reporting requirements from investors, and in part because it’s a convenient delay tactic. Let’s give everyone the benefit of the doubt for a moment and assume it’s just the former two things. 

As a startup, before you grow to become a Fortune 500 company, you don’t need a complete plan to take action and you likely don’t have ESG reporting requirements from investors yet. If you don’t need these things, then why would you need a net zero plan? Great question. You don’t, not yet at least. You do need an iterative carbon plan.

Let’s start by taking a quick look at the different high-level carbon plans that are out there, in order from most resource-intensive to least:

- Carbon Negative: your company is net zero and you’re eradicating all of your legacy emissions since business inception via carbon removal based offsets.

- Net Zero: you’ve reduced your Scope 1, 2, and 3 emissions as far as is technologically possible and offset the rest (more on offsetting in a later section of this guide).

- Carbon Neutral: technically you’ve balanced your emissions to zero, but you’ve taken a shortcut to offset emissions for parts of the business where you could have installed emission reduction technology instead of purchasing offsets.

- Iterative Carbon Plan: you intend to reach some combination of the carbon plans above eventually, but you’re prioritizing impact and action over comprehensiveness at the start.

‍Carbon Hotspots

‍Let’s look at some prompts that can help to identify carbon hotspots:

- Is software your primary product? What infrastructure supports your software? Do you own the infrastructure? Are you an infrastructure provider?

- Are you producing a physical good? What’s the mix of raw materials versus manufactured components in your supply chain?

- Is software or a marketplace a primary component of your business model? Do you own or rent the supply side of the market? Does your software connect to real world operations?

- What does your office space footprint look like? Are you going to account for remote team member home office space? How much team travel and commuting is there across your company?

To demonstrate carbon hotspot identification and carbon abatement options at a greater level of detail, let’s look at American Airlines’ net zero plan (in the chart below).

American has identified its carbon hotspots:
- Aviation fuel
- Air traffic control efficiency
- Airplane efficiency
- Etc.

Then, American identified carbon abatement options to mitigate its hotspots:

- Sustainable aviation fuel
- Air traffic control modernization
- Next-generation aircraft (electric or sustainable fuel fleets)
- Etc.

In examining the chart further, we can see the light gray dotted line on the top of the graph represents the business-as-usual emissions while the dark gray dotted line toward the bottom of the graph represents the company’s net zero target. The colored bars across the middle are American’s abatement options. Over time we see how the abatement options eventually drive the company to its net zero goal.

You do not need a net zero plan with abatement pathways mapped out like above. But this illustration can provide helpful context as you think about carbon hotspots and abatement options for your company. Remember, if you know the system, then you can intentionally change it to make it work for you.

‍Drive Growth

‍With a little creativity and research, you will quickly find carbon abatement options that can cut costs, improve product value, increase brand equity, drive talent acquisition/retention, and create a more efficient workforce.

This list is far from comprehensive, but our big hope is that it shows what’s possible and inspires you to search for the impact-driving moves that are at that beautiful intersection of climate improvement and startup growth.

Let’s look at a few more examples:

- Product Differentiation: If you get creative with sourcing, you’ll find that there are tons of material inputs out there that are low/no carbon and highly marketable, from carbon negative plastics to carbon neutral milk. These companies are building great brands on top of their climate conscious products, so sourcing from them and thinking about opportunities for brand partnerships could be a real win-win.

- Digital Infrastructure: Amazon, Microsoft, and Google all offer cloud infrastructure that is mostly or entirely powered by renewables. You don’t automatically connect to their green sites, so do some digging and push it forward in your product marketing. If you are leveraging Web3 infrastructure, not all providers are the same. For example, Chia is a highly efficient and therefore lower carbon footprint blockchain platform that you could build on top of.

- Travel, Commute, & Culture: You are probably already working on your ‘People Ops 3.0’ model to have a fully or partially remote team and/or a hub-and-spoke office space that has a smaller overall footprint than you would otherwise need for your workforce. You may encourage digital meetings over in-person as you’ve seen sales and productivity remain steady despite two consecutive years of remote only work. Regardless of the origins of your Future of Work model, you can start viewing it through a climate lens. Think about how you can improve your talent acquisition and retention, your efficiency, and your cost model, but also think about how those same things impact your carbon footprint and climate program. This is an easy win if it’s done well.

‍Imperfect Decisions

Give yourself permission to make decisions with only 80% of the information. As much of a science emission measurement is, it’s equally an art form. If you measure your emissions perfectly for a year, but it took you an entire year to do it and now your perfect data is outdated (and you haven’t taken any action), then what does perfect really mean? This is a common hamster wheel ‘trap’ in emission measurement, so let’s avoid it.

There is no set of data points or graphs or anything else that will tell you exactly what changes you need to make to decarbonize your business. You’re a startup founder and you know that businesses aren’t built in a classroom or boardroom; they’re built in the trenches. Decarbonization is the same. Executing, failing, and executing again better the next time is the name of the game.

The science of it can inadvertently turn off the most shrewd, strategic, operationally excellent business minds because of its academic nature. The good news is, you just have to summon your startup roots, roll up your sleeves, and get after it.


Thinking about climate action? Check out the entire True Ventures Climate Action Guide that I co-authored with True VP Priscilla Tyler.
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DM me on LinkedIn if you want to chat about anything.