Patents and ESG Compliance in Startups

Abstract

Abstract Patents help in protecting research and development efforts in an organization. They are known to increase valuation during merger and acquisition and act as signal for investors to make investment decisions in startups. Despite the value that patents add to a firm, vast majority of patents remain unutilised across larger organizations. Environmental, Social, and Governance investing is gaining popularity and investors are increasingly using ESG analysis to make investments. In this paper, we studied startups that are funded. Further, we identified and filtered out startups that are ESG compliant. We found that startups that are ESG compliant have better patent utilization. We believe that startups that are ESG compliant will foster responsible investing and sustainable innovation.