LCA (Life Cycle Assessment) and carbon footprint calculations can help startups understand their environmental impact and future-proof their business models. But is it always worth it?
Conclusion: The right timing and clear goals are crucial for achieving both environmental and business success with LCA and carbon footprint analyses.
The importance of life cycle assessments (LCA) and carbon footprint analyses depends heavily on a startup’s development phase. While strategic foundations are laid in the early stages, regular adaptation of these approaches becomes increasingly important during growth. LCAs are crucial for understanding environmental impacts throughout a product's life cycle, helping companies achieve their green goals and reduce their environmental footprint, as highlighted by Sphera.
In the pre-seed phase, founders should define clear sustainability goals and start considering the environmental impacts of their product.
Seed-stage startups can use simple LCA tools to identify hotspots in their product life cycle. Collaborating with universities or consulting firms often helps to access specialized expertise.
In the growth phase, it becomes necessary to regularly update LCAs, build transparent supply chains, and conduct more comprehensive “cradle-to-grave” studies. This step-by-step approach creates a solid foundation for implementing targeted and effective sustainability measures.
Three key factors drive the adoption of LCA initiatives: investor requirements, legal regulations, and market positioning.
Sustainability as an investor requirement: Sustainable investing is becoming increasingly relevant. According to the UN Principles for Responsible Investment, 85% of private investors are interested in sustainable investment strategies, and 52% of global assets under management (approx. $35 trillion) met ESG criteria in 2022. Between 2018 and 2020, sustainable investments grew by 15% (unpri.org).
Legal regulations: Especially in the EU, the obligation to collect and report environmental metrics is increasing. For instance, the EU CSRD introduces stricter reporting obligations for companies, making sustainability reporting a business imperative (ec.europa.eu).
Market opportunities: Sustainability offers competitive advantages. 96% of companies report growing customer interest in sustainable products, and 80% of consumers are willing to pay more for such products. This aligns with broader trends in consumer behavior and market demand (oecd.org).
Some companies already demonstrate how sustainability can be successfully implemented: EcoMaterial Inc. used LCA to develop a bio-brick with a 70% reduced CO2 footprint. GreenPackaging Solutions launched biodegradable packaging that decomposes within 90 days. These examples show how sustainability can positively impact both the environment and a company’s growth.
For sustainability to keep pace with business growth, a clear plan is essential. In many industries, over 80% of environmental impacts occur along the supply chain (un.org). Startups should therefore ensure from the outset that their supply chains, production processes, and distribution strategies align with their sustainability goals.
A successful example is CleanEnergy Tech: By optimizing their solar panel design using LCA, they extended product lifespans and reduced energy consumption in production—resulting in a positive environmental balance.
Collaboration with customers, suppliers, and investors also plays a key role. Transparency is essential for building trust. After all, 81% of consumers expect companies to actively contribute to environmental protection. For startups aiming to grow, it’s therefore vital to communicate their sustainability efforts openly and continuously develop them.
In the early stages of a startup, life cycle assessments (LCA) and carbon footprint analyses can often be inefficient, especially when data is lacking. This is particularly problematic when the product is still in development or produced only in small quantities. The lack of basic information makes it difficult to conduct a precise analysis.
Clara, Head of Communications at Hedgehog, describes the situation well:
“In some situations, it’s not yet possible to calculate a complete LCA because the product is still at too early a stage or production is very small-scale. Then it’s hard to imagine and understand, for example, what energy consumption would look like on a larger production line.”
Innovative or experimental materials also pose a challenge, as there is often no established environmental data for many of them. In addition, startups often struggle with financial constraints and limited staff, who are primarily focused on product development and sales. Alongside these internal challenges, external pressure also plays an important role.
Not every startup faces strong external pressure regarding sustainability. At the same time, the results of an LCA can be interpreted differently, leading to misunderstandings—especially when stakeholders have different priorities.
Given these internal challenges, the financial outlay should also be carefully considered. The costs for external consultants and the internal time required can significantly strain the budget. At the same time, resources are tied up that are urgently needed for core tasks such as product development, marketing, or sales.
The benefits of such analyses are often hard to quantify. While established companies can gain advantages from targeted sustainability measures, startups often lack the structures to implement such measures effectively. Timing is crucial: Investing too early can waste resources, while acting too late can cost valuable market opportunities.
After the challenges of the early startup phase, this guide shows you how to strategically connect sustainable actions with your business objectives.
The decision on whether LCA (life cycle assessment) and carbon footprint analyses make sense should be structured and well thought out. A proven tool for this is the SMARTS method (Specific, Measurable, Achievable, Relevant, Time-Bound, and Sustainable). Clear goals are the first step: Conduct market research to understand your target group’s expectations and regulatory requirements. A scalable business model takes both product launch and growth into account from the start, using resources efficiently.
Break projects down into milestones with specific goals, deadlines, and KPIs to implement sustainability measures step by step. At the same time, flexibility is essential to respond to market changes, feedback, or unexpected challenges. Good risk management helps identify potential problems early. Once the framework is in place, you should select the right tools to implement your plans.
Startups can leverage a wide range of modern tools and methods to make sustainability analyses efficient. Cloud computing solutions offer scalable options for data collection and analysis, while project management tools structure and improve teamwork. A great example is Daphne Technology. This company, specializing in reducing greenhouse gas emissions in hard-to-decarbonize industries, has won multiple awards, including the Swiss Economic Award 2023. Their success shows how strategic planning can lead to measurable results.
If your internal resources are limited, specialized consulting can be particularly helpful. Fiegenbaum Solutions offers support in life cycle assessments, ESG strategies, and impact modeling—often at rates that suit young companies’ budgets. Another inspiring example is Waste Hero, a Danish startup that, together with Django Stars, developed a platform to increase efficiency in municipal waste management.
Resource efficiency combines financial planning, operational practice, and environmental responsibility. Measures like remote work not only reduce operating costs but also open access to international talent. Lean inventory management cuts storage costs and waste, while energy-efficient measures lower both operating costs and your environmental footprint.
Digital solutions can help too: Beekeeper optimizes internal communication, while Nomoko uses advanced imaging technologies to create digital twins, making physical inspections unnecessary. Sharely shows how resources can be better utilized—renting out rarely used items saves money and benefits the environment.
Integrating financial, social, and environmental responsibility into daily business is essential. By setting achievable milestones, you can break long-term goals into manageable steps.
As Alexa Parker, founder and CEO of Crimson Park Digital, aptly puts it:
“Our work is never finished—digital marketing requires constant innovation and continuous growth.”
This attitude highlights that sustainability is an ongoing process that requires continuous adaptation and development.
Whether and when LCA and carbon footprint analyses are worthwhile depends on a startup’s individual circumstances. The right timing, context, and strategic management of limited resources are crucial for implementing sustainable measures successfully in the long term.
Taking a close look at the impact of such measures brings many benefits—whether to convince investors, position yourself better in the market, or make informed internal decisions. Often, environmental improvements go hand in hand with financial advantages. If sustainability is embedded in the company structure from the beginning, the business is better prepared for future challenges.
Especially in Germany, the startup landscape offers exciting opportunities. The German VC market traditionally places great value on climate tech investments, giving startups with sustainable business models additional funding opportunities. This shows: Sustainable strategies pay off not just for the environment, but also economically.
Success lies in balancing ambition and realism. Startups that integrate sustainability into their business strategy early save time and costs later on. At the same time, they gain clear competitive advantages and become more attractive to investors.
It’s important to view sustainability as a dynamic process that grows with the company. The choice of measures should always match the company’s current stage of development. This way, sustainability becomes a driver of long-term business success.
By using LCA and carbon footprint analyses, startups in the growth phase can achieve numerous benefits. These methods enable more efficient use of resources, compliance with legal requirements, and a stronger brand image by making sustainability efforts visible. LCAs also help companies align with ESG criteria and demonstrate their commitment to responsible business practices.
Moreover, such analyses help attract eco-conscious investors and customers—a crucial step for staying competitive and securing growth in the long run. Especially in Germany, where sustainability is gaining importance, these measures can make all the difference for a company’s success.
Startups with a tight budget can do a lot for the environment with simple and affordable measures. Highly effective approaches include energy efficiency, waste reduction, and sustainable sourcing. These strategies often require minimal investment but offer significant environmental benefits.
Integrating solutions based on ESG principles (environmental, social, and governance) can also help strengthen sustainability and social responsibility—even with limited resources. With a clear focus on practical and thoughtful actions, startups can make a positive difference in the long term without overstretching their budget.
Investors in Germany are increasingly focusing on sustainable business practices, even if these requirements are not yet mandatory. But that could soon change. With regulatory changes like the EU CSRD, which introduces stricter reporting obligations for companies, expectations are rising. For startups, this means: Those who want to stay competitive should start implementing measures like life cycle assessments (LCA) and CO₂ footprint analyses early on.
Legal requirements also play a central role. In Germany, for example, there are regulations that require life cycle assessments for public construction projects. Such rules could prompt startups to integrate sustainable practices into their processes from the outset. This not only ensures legal compliance but also opens up new market opportunities.
Additionally, conducting LCAs can help startups understand their carbon footprint and contribute to climate change mitigation efforts, aligning business growth with global environmental goals.