Green start-ups remain drivers of transformation

Green start-ups remain drivers of transformation

Although the proportion of green start-ups remains high, it is declining slightly due to the current difficult market and financing conditions. This is shown by the latest Green Startup Monitor.

Fast ein Drittel der Neugründungen sind nachhaltige Firmen, so der aktuelle Green Startup Monitor 2024.
Almost a third of start-ups are sustainable companies, according to the current Green Startup Monitor 2024.

For the sixth time, the Borderstep Institute for Innovation and Sustainability and the German Startups Association have analysed the contribution of green startups to the transformation of the economy and identified their specific needs and challenges. This year, the Green Startup Monitor 2024 (GSM) shows a rather mixed picture: at 29%, the proportion of startups whose business model is based on sustainability is almost a third. "These start-ups therefore play an important role in the transformation towards a climate-neutral economy by 2045," writes Robert Habeck, Federal Minister for Economic Affairs and Climate Protection, in his foreword to the report.

Strong start-up ecosystem required for sustainability

At the same time, however, the proportion of green start-ups has fallen slightly compared to the previous year (35%). The reasons for this are the difficult market situation and uncertain financing options, the authors write. As a result, sustainability efforts are in danger of losing relevance across the board. The report therefore shows "how important a strong start-up ecosystem is for the topic of sustainability and how overcoming the current challenges - especially in the area of financing - also pays off for the green economy".

Rapid growth and high market share targeted

On the other hand, more than half of green start-ups are pursuing the goal of growing quickly and achieving a high market share, they say. "This makes them transformation accelerators," summarises Klaus Fichter, founder and director of the Borderstep Institute for Innovation and Sustainability and co-author of the Green Startup Monitor. "Many of them also cooperate more frequently with universities and research organisations than non-green start-ups. The knowledge generated from research with taxpayers' money thus creates economic and ecological benefits for society in a particularly effective way. That's why we need better conditions for the commercialisation of research results in Germany," appeals Fichter.

This increased collaboration with universities and research institutions is evidence of the importance of start-ups "as a bridge between academic research and practical application, transforming the latest research findings into sustainable business models".  At the same time, green start-ups are also working more frequently with established companies, which emphasises their importance as "drivers of innovation and change for the entire economy".

Cooperation with companies and transparency increases

Contrary to the current trend, the monitor even recorded an increase in cooperation projects compared to the previous year. At 24%, the proportion of female founders is also higher than for non-green start-ups (17%). A positive development can also be seen in the transparency of sustainability criteria. The proportion of green start-ups that can prove their sustainability impact with facts and figures rose from 27% to 39% compared to the previous year. "This shows a pleasing development in the area of impact management," says co-author of the Green Startup Monitor 2024, Yasmin Olteanu. "The Green Startup Monitor 2024 demonstrates the growing awareness of evidence-based sustainability practices within the start-up scene."

Green Startup Monitor 2024

The Green Startup Monitor can be downloaded free of charge from the Borderstep Institute website (only available in German).

The conclusion of the GSM: Sustainable start-ups strengthen the sustainability of the German economy through their drive for innovation and growth. "An environmentally friendly and sustainable economy must become the standard," says Alexander Bonde, Secretary General of the German Federal Environmental Foundation. "Sustainability is a key factor if companies want to remain future-proof and competitive. The Green Startup Monitor makes it clear how important innovative and environmentally conscious business strategies are. They ensure resilience in competition."