UK startups trailing on net zero and responsible AI

35% of European start-ups measure their carbon footprint versus 24% in the UK, according to annual research by ESG_VC and BVCA.
UK startups trailing on net zero and responsible AI

The percentage of start-ups measuring their carbon footprint has increased from 16 to 28 according to new data from ESG_VC. Data was collected from 587 start-ups backed by leading venture capital firms including Atomico, Molten, Beringea, Oxford Science Enterprises and Astanor.

8 percent of start-ups now have a net zero policy in place - an uplift from 5 in 2022 - while a further 17 percent of those surveyed expect to set a net zero target in 2024.

41 percent of the start-up participants do not have a woman on their board, while the proportion of companies with no women in senior management roles has increased to 20 percent from 15 in 2022.

Startups are investing heavily in alternative sources of skills and talent, as they grapple with constrained budgets and a competitive recruitment market. 57 percent analysed are providing study support to their employees – up from 40 percent in the prior year - while almost half offer an internship, apprenticeship, or trainee programme, an increase from 2022.

‌Companies participating in the research based in Europe were found to be outperforming their UK peers on net zero, with 35% of European start-ups measuring their carbon footprint versus 24% in the UK. Europe also leads the UK on the adoption of responsible AI, with 34% of European start-ups offering staff training or codes of conduct on the responsible use of AI versus 30% of UK start-ups.

In contrast, UK companies were found to lead on issues such as diversity and inclusion, with 45 percent of UK start-ups providing equality, diversity, and inclusion training for their staff, compared with 25 percent of European companies. UK start-ups were also found to have greater focus on data security and privacy, with 70 percent reporting that they have processes in place to comply with data regulation compared to 57 percent in Europe.

Diversity within specific tech sectors revealed that healthtech and biotech start-ups lead the way, with only 26 percent of businesses having no women on their board, compared to 45 percent of SaaS start-ups failing to appoint a woman to their board of directors. However, 37 percent of SaaS companies offer training or codes of conduct on responsible AI ahead of healthtech and biotech and other sectors.

Now in its third year, the research has been published in partnership with the British Private Equity and Venture Capital Association (BVCA) and Marriott Harrison, the leading independent legal venture and growth specialist. It analyses performance against standardised metrics spanning environmental, social, and governance issues within start-ups. It also provides benchmarking of performance by sector and geography, as outlined below.

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