EDHEC launches the first European barometer of responsible practices within start-ups

EDHEC Business School has unveiled the results of the first European barometer of responsible practices within start-ups, conducted by INNOVA Europe. Founded in 2022 by EDHEC, ESMT Berlin and POLIMI Graduate School of Management, the INNOVA Europe coalition groups together 10 European higher education institutions*. It advocates for a more sustainable form of European entrepreneurship that serves societal and environmental transitions.

For the survey, INNOVA Europe questioned 433 European start-ups with a view to understanding their engagement with responsible practices, the obstacles they face and the levers employed. More precisely, the Barometer sought to assess the extent of intentions with regard to responsible practices in the European entrepreneurial ecosystem, and the degree to which they are already implemented and monitored. It also sought to provide stakeholders (schools, incubators, investment funds, etc.) with ideas for better supporting start-ups with responsibility matters.

Responsibility confronted with reality

A total of 93% of start-ups said they incorporate responsible practices into their operations, while 81% have actually implemented actions on at least one of the four pillars defined by the barometer: environmental, social, governance or civic. However, the lack of financial resources (69% of start-ups) and time (58%) remain the main obstacles to taking action, although there were notable differences according to the country.

In addition, although the majority of start-ups consider responsible practices to be useful, they do not see them as being strategically important as yet: 42% feel they offer real added value, 40% consider they provide some advantages, while 18% fail to see any value in them. Lastly, responsible practices are not neglected due to a lack of conviction, but because they struggle to outweigh other priorities deemed to be more strategic against a backdrop of scarce resources.

Still-limited monitoring via KPIs

Although 81% of start-ups questioned have already taken action on at least one of the four responsible pillars, only 28% currently measure the impact of their actions via key performance indicators (KPIs). And without such monitoring, it is hard to assess the progress made, to communicate in a fully transparent manner or to adjust strategy over time. 

In addition, the survey showed that monitoring of actions is hindered by a lack of resources (27%) and time (25%), as well as by internal buy-in issues (19%) and a shortage of expertise (18%).

The driving role of stakeholders

Start-ups solicited on responsible matters by their ecosystem (clients, investors, incubators, etc.) are twice as likely to monitor their ESG indicators (40% versus 17%). However, this external pressure is highly uneven. According to the barometer, one start-up in two has never been questioned on its responsible practices, thus suggesting this movement is a work in progress rather than a widespread trend.

Incubators and investors thus have a central role to play by systematically incorporating monitoring of the impact of responsible practices into their selection, support and assessment criteria. The objective is not for start-ups to set up restrictive reporting procedures, but for them to monitor two or three key indicators in relation with their products and identity, in order to improve their stakeholder communications and to unite staff around common responsible goals. This requirement, if it becomes structural, will exert traction on the ecosystem and enable start-ups to be transparent with their stakeholders, while also coalescing their people around shared responsible objectives.

“Often relegated to a communication or regulatory compliance matter, responsibility is still struggling to impose itself as a strategic priority, even though the intention is definitely there”, says Yasmine Machwate, Head of Incubators at EDHEC Business School. “It’s a demanding approach, but one that represents a genuine lever of differentiation and long-term performance. We’re convinced of the European entrepreneurial ecosystem’s ability to transform this requirement into a distinctive marker and to affirm its singular vision of entrepreneurship”. 
 

• Download the #dataviz for the barometer (pdf)
• Read the associated press release (pdf)
• See the full barometer (website)
   

* Aalto University, EDHEC Business School, ESMT Berlin, ETH Zurich, IE University, Kyiv School of Economics, London Business School, POLIMI Graduate School of Management, Rotterdam School of Management et University College Dublin