Europe is leading the world, when it comes to transitioning to a green and sustainable economy. In the environment sector, cleantech startups like Northvolt have reached unicorn status based on their revolutionary energy storage system and overall cities in Europe are gearing up strategies to foster innovation in the ESG fields.
Green transportation is the norm across Europe. Berlin has 1,697km of bike lanes, the largest network in Europe. Moscow has Europe’s largest fleet of 800 electric buses, as well as the most shared cars, 26,000 of them. London’s metro extends to over 400 km. With 10 out of the 12 European cities achieving scores of 75% in the UN e-government survey, as opposed to only 5 out of the 28 from the rest of the world, Europe is an acknowledged leader in citizen participation as well.
And the recent success of the mRNA technology that is behind BioNtech’s and Pfizer’s anti-Covid-19 vaccine would have not been possible without the combination of cutting-edge research and entrepreneurial mindset having taken hold of Europe’s leading health research institutes.
Which City is leading ESG innovation?
The undisputed investment capital of Europe, London, also leads in ESG innovation readiness. It tops the rankings in 3 out of 4 sub-indices, with the largest number of entrepreneurs, the largest number of ESG investments, and great societal backing for ESG with an unparalleled amount of bottom-up initiatives as well as corporate investments and acquisitions in the ESG sectors.
It has the highest number of ESG startups.
The Russian capital competes on eye-level with London and the other European hotspots in 3 out of 4 sub-indices, even taking the lead in ESG Governance due to the strong push by government and Russian corporates for ESG innovation.
Moscow is building EdTech solutions faster than anyone else, with 30% of its startups focused on EdTech, against a continental average of 14%.
The French leadership’s prioritization of innovation and strong private sector support reflects in the ranking of Paris in the Startup Innovation Index. The strongest points for Paris are an unmatched startup support as well as its corporate innovation culture and international connectivity.
With 34 acquisitions, Paris is the second strongest Exit market for ESG startups in Europe. Paris-based corporates like PSA Group, Engie, Société Generale or also BlaBlaCar have acquired emerging startups from all around the world.
The German capital gets its highest scores in Entrepreneurship Support, thanks to the second highest number of accelerators in Europe after London and high amount of seed investments for ESG startups ranging between $2 and 3mn on average.
What is even more encouraging is the speed at which these accelerators are shifting focus to ESG – 31% of the startups in Berlin’s 7 top accelerators are active in one of the ESG sectors.
The Catalonian capital excels in the areas of Governance and International Connectivity due to the city’s good transport infrastructure, making it a great market for public transportation and governance related startups. The per capita length of the metro line exceeds the values of the higher-placed London and Moscow.
The Swedish capital excels in terms of Investment Levels and Specialization. In keeping with the green orientation of the Scandinavian city, it generated investments of approx. 5 billion Euro in environmentally oriented startups. Including the largest European impact unicorn Northvolt.
The Bavarian state capital stands out in the Innovation Culture category. The business R&D expenses are the highest in the field and companies headquartering in Munich acquired 13 ESG startups since 2016.
With almost 19 tourist arrivals per inhabitant, Amsterdam is right at the top in Europe. The city’s modern and international orientation is evident in its rankings for International Connectivity and Community & Network with the most acceleration programs per capita. With its focus on green transportation, the high number of bicycles and a low per capita rate of cars, Amsterdam presents a fertile environment for innovators in urban mobility solutions.
The Spanish capital excels in the areas of Government Action, Governance and Knowledge Base. With an outlay of $930 million, Madrid boasts the 6th highest R&D Expenditure by Local Government in Europe. 10,000 programmers registered on stackoverflow as well as 82,000 STEM students in the city reflect a high-quality education system.
The city stands out for its Diversity & Inclusivity and strong Community of Entrepreneurs. About 55% of the students at the universities are female in city of fashion and design, which additionally is among the best in Europe in terms of per capita creation of startups in the social sector.