Sustainability struggles
Is a Sustainable Startup a Suicidal Business Model?
Is building a sustainable startup setting it up for failure? Scaling any business is tough, but when sustainability is at its core, the challenges multiply. Higher costs, added complexity, and an uneven playing field—where polluting companies aren’t held accountable for their impact—make it even harder to survive.
In the Netherlands alone, eight recycling companies went bankrupt in 2024. This raises a crucial question: how can we ensure that sustainability-driven businesses don’t just survive, but thrive?
The Challenge:
An Uneven Playing Field
The reality is that sustainable businesses often bear extra financial burdens, while those that pollute more don’t pay the true cost of their impact. This distortion in the market discourages circular innovations and makes it difficult for responsible companies to compete with cheaper, unsustainable alternatives.
So, what can be done to create a fairer, more supportive environment for sustainable startups?
Five Key Solutions for a Fairer Market
💶 Shift Taxes from Labor to Raw Materials
Current tax structures heavily burden labor, while raw material extraction remains relatively cheap. By reducing labor-related taxes and increasing levies on virgin materials, governments can encourage businesses to prioritize resource efficiency and sustainability. (See The Ex’tax Project for a detailed proposal.)
🔍 Implement True Cost Pricing
The environmental impact of products—such as pollution and carbon emissions—is rarely reflected in their price. Integrating these costs into pricing through taxation would create a more transparent and responsible market, making sustainable options more competitive.
📣 Mandate Recycled Materials
To accelerate circularity, policies should require a minimum percentage of recycled content in products. Models like the National Circular Plastics Agreement (NCPN) already provide a framework, and additional incentives, such as reduced VAT for recycled materials, could further boost adoption.
🫰 Tax Virgin Plastics
Cheap, virgin plastics continue to dominate the market, making it difficult for recycled materials to compete. A levy on imported virgin plastics would help level the playing field and promote the use of sustainable alternatives.
📈 Ensure Long-Term Sustainability Planning
A strong government-backed roadmap for sustainability would provide investors with greater confidence in the sector. Clear regulations and long-term policies can encourage investment in circular solutions, reducing uncertainty for sustainable startups.
The Time for Action Is Now
Change won’t happen overnight, but even Klaas Knot, President of the Dutch Central Bank, has acknowledged the need for tax reform to support sustainability. If we want sustainable startups to succeed, we need to rethink our economic system, ensuring that those who innovate for a better future aren’t the ones paying the highest price.
Now is the time to take action. The question is, will policymakers and businesses step up before more sustainable startups disappear?
Casper van der Meer
CEO Upstream Trophies
About the author
Casper is the CEO of Upstream Trophies and has a background in Industrial Design Engineering. Over the years he specialized in sustainable product design, with a special interest in plastic products. He believes that the corporate trophy market is long over due for change. Creating awards that spark conversations, tell a story and create sustainability ambassadors. The industry needs this shift. Trophies should reflect the future, not repeat the past.
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