Confused about ESG, impact, and sustainability? You're not alone. Knowing the difference helps you save time and communicate more clearly with investors, customers, and partners.

This topic frequently leads to confusion within the industry, underlining the need to differentiate between terms. Here’s our take on this, described as simply as we can.

<aside> ✅ Environmental, Social, and Governance (ESG) refers to the critical factors that, while not always visible on a traditional balance sheet, have a direct and significant impact on a company's financial outcomes and long-term success. It encompasses the risks and opportunities tied to a company's practices in managing environmental, social, and governance issues. Forget the jargon and labels—ESG addresses the tangible and intangible elements that build more resilient and robust businesses over time. Every company can and should actively consider it as part of its strategy for sustainable success.

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• The diagram below shows the five business areas to which ESG relates.

• A company that chooses to incorporate ESG into its business model, processes, and policies will prevent or reduce significant effects on important negative outcomes for people and the planet. This can be impactful in itself.
• ESG and impact are not mutually exclusive. For a company to have an impact, strong ESG practices also need to be in place.
• At Antler, impact companies are those whose product or service intentionally creates positive outcomes for society or the environment, not just avoids harm.

<aside> 🌟 Impact, on the other hand, focuses on the intentional outcomes of a company's products, services, or practices that intentionally generate positive, measurable social and environmental benefits. In other words, founders developed a product that tackles a sustainability challenge. Often, impact companies align with the UN Sustainable Development Goals (SDGs), which offer a framework for addressing global challenges. However, it's important to note that the SDGs were primarily designed for governments, not investors or startups.

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• Antler invests in strong founders and scalable businesses first. We support all companies to integrate ESG considerations, and we categorize startups as "impact" if they have the potential to drive positive social or environmental change through their core product.

How Antler integrates ESG, impact, and sustainability

<aside> ⚖️ Sustainability: More than just the environment—sustainability is a dynamic system balancing human needs, environmental health, and economic resilience.

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At Antler, we use sustainability as an all-encompassing term that includes both ESG and impact, recognizing their distinct yet complementary roles.

• Sustainability is dynamic, it evolves with markets, technologies, and social needs.
• It’s not one-size-fits-all, each company must define what sustainability means in its own context.
• Early-stage startups must balance immediate business realities with long-term sustainability ambitions.

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ESG strengthens resilience. Impact defines intentional contribution. Sustainability weaves them together for long-term relevance, value creation, and competitive advantage.

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