Startups key to green transition to address climate change

[Jesse, “Dismantling Roadblocks to a Sustainable Transition,” Environmental Law Reporter 54.1, GDI-JCR]

Our future depends on a full of transition to a sustainable economy. Entrepreneurs of sustainable startup businesses (green startups) help lead this transition,3 daring us to reimagine every aspect of the current economic order. Entrepreneurship, however, is no easy task, with approximately 75% of new U.S. businesses in the past couple of decades failing within 15 years of their founding.' Sustainable entrepreneurship is even more daunting-much has already been written, for instance, about the significantly greater market challenges and longer pathways to commercial viability for climate technology startups5 than for more traditional software startups, including an investor landscape ill-suited to support their growth.7 Yet relatively little has been written about the legal and policy challenges facing green startups that can underlie the market challenges. This Article aims to fill an important gap in the literature by seeking both to identify some of the most critical legal and policy challenges facing green startups in the United States and to propose potential solutions to these challenges. In particular, it focuses on legal and policy challenges that are either distinct to green startups or more relevant to green startups than to non-green startups. It begins with a discussion of why such a gap needs to be filled in the first place, including a brief literature survey highlighting the dearth of coverage of the topic and why a targeted focus is warranted. Part II continues by describing the results and significance of original primary research9 on the topic that includes interviews, surveys, and focus groups with chief executive officers (CEOs) of early-stage green startups, along with senior law firm partners with significant experience advising green startups, law firm pro bono counsel, law firm pro bono staff, and senior directors at nonprofit legal aid groups. Part III offers recommendations, based in significant part on the results of the focus group sessions, for addressing some of the legal and policy challenges for green startups identified in the primary research Part IV concludes. Whereas there is at least a small pool of literature covering the legal and policy challenges facing U.S. startups generally," there is a relative dearth of coverage specific to the challenges facing U.S. green startups." Aside from Lisa LeSage's analysis of state and local regulatory obstacles facing small and emerging sustainable businesses, much of which primarily focuses on businesses in Oregon,12 the existing literature covers only tangential topics, such as substantial discussion of law and policy issues related to green technology,13 including clean energy innovation14 and energy storage technology15 in particular, as well as law and policy issues related to clean energy development.16 What relevant coverage otherwise exists primarily focuses on green startups globally and in other countries, and offers a more limited examination of legal and policy issues related to the barriers facing green startups. 17 Yet, in interviews and surveys with 20 law firm partners18 and green startup CEOs with experience advising and working at, respectively, both green and non-green startups, over 70% agreed that there was a distinction between the most critical legal challenges facing green startups versus those faced by non-green startups, warranting a closer look into this topic.19 The importance of green startups for addressing the existential threat of the climate crisis and related ecological crises also further justifies a focused analysis on what may be most helpful for addressing these challenges in the green startup context.