ROSE Framework — making ESG and Impact accessible for early-stage startups & investors.

At START Global, we live by the motto “Challenge Today, Change Tomorrow”. Living in a world where technology and innovation are constantly redefining the scope of possibilities, we realized that we have the responsibility to define what “Changing Tomorrow” really means. How will technology shape our realities and how can we ensure that it is done for the better? Back in 2019, we asked ourselves and more than 100 investors this question at the START & btov Think Tank 2019. The outcome of the discussion was the recognized need for a framework to guide both entrepreneurs and investors in fostering sustainability and identifying the impact of technology and early ventures. Challenge accepted! At START Global we decided to wrap our head around it and we created the ROSE Framework, standing for Return On Society & Environment.

“We strive for a world where entrepreneurial success is synonymous with both financial return as well as social and environmental profitability”.

Before diving into the details, what is Sustainability and what is Impact? And how are they linked?

• Sustainability is about long-term existence. It is about people, planet and profit and how a company manages its resources to live and develop over a period of time. As emphasized by Gabrielle Ortais, part of the ROSE Board of Experts, a key element of sustainability is that the use of resources must be balanced: create as much as you take, without destroying elements of the ecosystem. Therefore, part of it is internal to the company and related to its operational practices (often referred to as ESG).
• On the other side, Impact defines the way in which a business model or a product generates long-lasting change, whether positive or negative, for society and the environment.

How is the ROSE framework different from the others out there?

1. ROSE is tailored to the time-constrained reality of startups — unlike most frameworks which are made for corporates and which are often very time-consuming to complete.
2. It is also adapted to hectic and early development stages: even if the company doesn’t have well-defined processes yet, and it lacks a solid organizational structure for supporting a well-designed sustainability strategy, ROSE is about planting the seed from day one.
3. The framework looks into both the internal sustainability of startups (through operational practices) and their external impact, allowing founders to recognize goals and take concrete action steps.
4. The approach of ROSE is a non-judgmental one, it is rather focused on empowering entrepreneurs to take concrete actions without the creation of ratings or meaningless gold medals.

In addition, ROSE is grounded in academic research. The project is being developed in a partnership with Marc Gruber’s Chair at EPFL, ensuring the rigorous gathering of learnings and data to benchmark over the long run.

Now let us take a deeper look at ROSE itself. The framework is composed of two pillars (see image below):

1. Operational practices: The first pillar concentrates on assessing the operational sustainability of the startup, starting with an ESG-based self–assessment. Building on the learnings of this first assessment, the startup then defines Improvement Goals.
2. External Impact: The second pillar focuses on establishing an Impact Valuation to identify the startup’s impact on the external world and set related targets.

When ROSE is implemented within a VC, the investment manager connects us, the START Global team, with the company, which we will guide and support throughout the entire process. We are especially involved in the establishment of the Impact Valuation, as this is the most complex step. The final results of the framework are two reports shared with the Investment Managers, which will be followed upon in the Board meetings twice per year.

ROSE in two pillars

What have we learned so far?

Here a few truths we have established about sustainability.

1. ESG is hard and complex. If you decide to approach it with integrity, taking action will require real efforts. There is no way around that. Read here the perspective of btov Partners who has been pioneering the framework with their portfolio startups.
2. Entrepreneurs want to do more. They are the ones really walking the talk, we just empower them with the right tools to approach the problem, and they are finding and implementing the solutions.
3. Pressure from stakeholders is coming: from customers who are becoming more conscious than ever about their purchasing decision; from employees; from investors who are increasingly feeling the responsibility of their invested capital. But also conversely, as founders start expecting from their investors that the topic is put on the table.
4. Sustainability also encompasses diversity and as put straightforwardly by our expert in Gender matters, Eglantine Jamet: “If you don’t do anything special to propose gender equality, then it’s absolutely certain that you don’t.” The steps to achieve more diversity in teams, especially in tech startups or VCs, must be consciously conceptualized and accompanied by a strong willingness to change the status quo. This generally applies to all ESG topics.
5. CO2 offsetting comes last. We must follow the logic 1. Measure 2. Reduce 3. Offset what can’t be reduced. In other words, planning and reorganizing operations is the core and real purpose of getting a footprint assessment, and offsetting should only come as a last resort for what can’t be reduced. Otherwise, and put bluntly, it’s bullshit: would it not simply be equivalent to buying your entrance to paradise, having misbehaved your entire life? We believe this approach is strictly missing the point.

Where are we currently standing?

Thanks to btov Partners, especially Florian Schweitzer, who have been involved from the very beginning of the project, and HV Capital, with Martin Weber leading the efforts, we have been able to work in close collaboration with founders and top investors. As a result, we were able to tailor the framework at the intersection between academic excellence and ground usability, combining the best of both worlds. In addition, we are very pleased that Acton Capital is now also supporting our ambitions.

ROSE in a few numbers:

• 3 VCs are implementing ROSE and rolling it out to their portfolio companies as well as to new investments.
• 3 new VCs are being onboarded
• 18 startups are already applying our framework, among which DyeMansion, LimeHome, Lendis, neptune.ai, gitti, etc.
• We supported the development of the Sustainability Playbooks for VCs and startups by TechFounders, akzente, and UVC Partners, which integrate the ROSE Framework as a core element.

And we intend to grow this movement even further in 2021. To conclude, we all know how relevant sustainability is and how challenging it is to approach it properly. But the shift is happening, and soon it will be the new norm. We have pioneered a framework that, driven by the next generation, is gaining common acceptance in all its stakeholders and we invite you to join us in challenging today and shaping tomorrow!

For more information, join us at the START Summit 2021, and don’t hesitate to contact us at info@startrose.ch .

by Greta Carioli & Thaïs de Tribolet