ESG for startups: what investors ask at seed and Series A

At seed and Series A, most UK investors who ask about ESG want the same five things: how you handle personal data, how you treat your team, who makes decisions and how, what your environmental footprint is, and whether your product could cause harm. They are not expecting a sustainability strategy. They want honest answers, a simple baseline and evidence that you have thought about the risks that genuinely apply to your business.

That is very achievable for a founder with a full calendar. Most of it is writing down what you already do.

Why are investors asking startups about ESG?

The pressure usually starts above your investor. Pension funds, foundations and government-backed funds that invest in VC funds increasingly want evidence that ESG is part of how those funds pick and manage companies. So the fund asks you.

The approach at UK firms is mostly pragmatic. MMC Ventures, for example, publishes a responsible investing framework explaining that it sends a short ESG questionnaire during diligence, before or after the term sheet, with an introduction making clear the aim is to understand where the company is now rather than to catch it out. After investment, it asks for the questionnaire again each year to track progress.

Many funds use the ESG_VC measurement framework as the basis for that annual check-in. It was designed for venture-backed companies from seed to growth stage, and its most recent report describes 44 metrics, with the explicit note that startups are not expected to answer all of them. ESG_VC merged with VentureESG in 2025, so you may see either name.

What do investors ask at seed?

Seed questionnaires are short and mostly qualitative. Expect questions along these lines:

• Data privacy and security. What personal data do you hold, where is it stored, who can access it, and do you have a privacy notice and basic security controls? For most software startups this is the topic that matters most.
• Workforce. How many people, employed or contracted, how you hire, whether you have an equal opportunities approach, and what benefits or training you offer.
• Governance. Who sits on the board, how decisions are made, how conflicts of interest are handled and who is responsible for compliance.
• Environmental impact. Whether you have measured your footprint, even roughly, and what drives it. For an office-based team it is usually electricity and flights.
• Responsible product use. Could your product be misused, cause harm or produce biased outcomes? This matters a lot for AI, fintech, healthtech and consumer apps.

How does it change at Series A?

By Series A the questions get more specific and more numerical. Investors want figures they can track over time, because you will be reporting them every year after the round closes.

Typical additions include:

• A carbon footprint in tonnes of CO2e, broken down by source
• Headcount by gender and, where you collect it, other diversity data in aggregate
• Written policies: environmental, code of conduct, data protection, health and safety
• A named person responsible for ESG, even if it is the COO doing it part-time
• Board composition and how often the board meets

Investors also look harder at the issues that matter for your sector. VentureESG’s materiality tool sorts ESG issues by sector (B2B SaaS, consumer tech, fintech, healthtech and climate tech) and by stage, from pre-seed through to Series C and D. A fintech will be asked more about financial inclusion and fraud. A healthtech will be asked about patient data and clinical safety. That idea of focusing on what actually affects your business is called materiality, and it is worth understanding before your first diligence call.

What does a good ESG answer look like?

Good answers share three features: they are true, they are specific and they say what happens next.

Take an 8-person B2B SaaS company in a co-working space. A weak answer to “What is your environmental impact?” is “We are a software company so our impact is minimal.” A strong one reads more like this:

Our footprint for the 12 months to June 2026 was about 3.5 tCO2e, calculated using UK government conversion factors. Roughly two-thirds came from eight return flights to customer sites in Europe. Our co-working share of electricity and heating was estimated from desk use. We plan to move European customer visits to rail where the journey is under six hours.

That answer admits the biggest source, explains the method and shows a sensible next step. It also matches the report sitting in the data room, which is what makes it credible.

If you do not have something, say so and give a date. “We do not yet have a written environmental policy. We will adopt one before the round closes” is a perfectly good answer at seed.

What worries investors?

A few things can turn ESG from a box-ticking exercise into a real diligence concern:

• Personal data handled loosely. Customer data in shared spreadsheets, no access controls, no privacy notice.
• Nobody owns compliance. If every question gets the answer “the founders deal with it”, investors worry about what happens as you scale.
• Undeclared conflicts. Founder-owned suppliers, related-party contracts or side arrangements that are not written down.
• Overclaiming. Calling yourself carbon neutral or “the sustainable choice” without evidence. That is greenwashing, and diligence teams are trained to spot it.

None of these need a big budget to fix. They need a decision and an afternoon.

How to get your ESG baseline done quickly

You can produce a credible baseline without a consultant. The ESG Now questionnaire covers each topic investors ask about and produces a shareable report, your Scope 1, 2 and 3 footprint using UK government factors, and a private action plan that shows which policies you already have in place and which are worth adding next. Where you do not have a figure, it offers an estimate and labels it clearly, so an investor can see exactly what is measured and what is not.

How long will yours take?

Pick the option that sounds most like your business. You will see a realistic time, what to have nearby and a head start on the questions.

Which sounds most like you?

Sole trader working from homeConsultants, designers, developers, coaches10 to 15 minSole trader or freelancer in a co-working spaceA desk at a WeWork, Regus or local hub10 to 15 minSmall team in a co-working or serviced officeStartups and agencies with 2 to 25 people15 to 20 minSME with its own office and no vehiclesProfessional services, tech firms, studios20 to 30 minSME with vans, cars or regular staff travelTrades, field services, consultancies on the road30 to 45 minShop, cafe, workshop or product businessRetail, hospitality, makers and manufacturers30 to 45 min

Your estimate

About 15 to 20 minutes

Around 40 questions, most of them multiple choice

Quick, and investors love seeing it.

No utility bills needed. You will add a few details about your team, such as training and benefits, which is the part investors and grant assessors tend to look at closely.

Handy to have nearby

• Your headcount and number of desks or memberships
• A rough idea of team trains and flights last year
• Any staff benefits you offer
• How your team usually gets to work

Missing something? Estimates are fine, and you can come back to any answer later.

Most small teams find they are doing more good things than they realised. The report puts them in writing.

Start with this profile

First report free. No card needed.

Your answers save as you go, so you can stop halfway through a busy day and pick it up later. Your first report is free. You can start your report here, or look at the sample report first to see what an investor would receive.

For the detail on specific questionnaires, read how to prepare for an ESG due diligence questionnaire. If you want the bigger picture for founders, the startups raising investment hub brings it all together.