At VentureESG, we understand ourselves as an evidence- and research-driven organisation. We use our position at the cutting edge of ESG for VCs to conduct research to advance our knowledge of best practice. The insights we generate underpin the tools, resources and frameworks we produce. In all our research, we follow principles of co-production and involve our communities of VCs and LPs both in designing research questions and generating findings.
Get in touch about our current research projects or if you are interested in funding or working on new research opportunities.
While ESG has seen a surge among venture capital investors since 2020, confusion about what ESG is abounds. In this white paper, we propose a first fit-for-purpose working definition of ESG for VC based on twelve months of conversations with hundreds of industry stakeholders, VCs, LPs and academics alike. We contrast ESG with other terms such as impact, sustainable and ethical investing and CSR, embed it in its history and make a strong case for why ESG is the right term to use, also in the VC world, right now.
Integrating ESG into companies and investment decisions has been shown to have positive bottom-line implications – but only if the ESG factors are material. How can such a materiality assessment to identify material ESG factors be conducted in Venture Capital? The VentureESG White paper #2, authored by Susan Winterberg, outlines both the basics of materiality as well as concrete steps to conducting a materiality assessment and special considerations for evaluating ventures during early and growth stages.
AI is part of an ever increasing number of VC-backed companies; the necessity to integrate AI Ethics into ESG for VC is hence growing rapidly. In a one-year project, Ravit Dotan developed a VC-specific toolkit consisting of a workflow and detailed guidebook on how to conduct an AI assessment. This project was funded by the IBM Tech Ethics Lab at the University of Notre Dame. You can read more in Ravit’s VentureESG blog post and on her homepage.
While general ESG integration is relevant independent of company sectors, specific sectors, such as biotech and life sciences bring their own ESG challenges. In this one-year project, Dr Rob Quinlan, now senior scientist at the Crick Institute, produced an extension of our ESG universe of issues for biotech and life science investments. Based on interviews with 20+ biotech VCs and LPs, the resulting set of questions is useful both for due diligence and portfolio management to identify ESG challenges and possible areas of ESG improvement.
The UN Guiding Principles lay out in detail how businesses are required to incorporate human rights into their operations and decision making; based on stakeholder interviews with civil society organisations, VCs and LPs, Joanne Azem puts together a fit-for-purpose human rights VC due diligence framework as a further extension to our universe of issues. This research was funded by Luminate and builds on their RightsWise framework as well as prior work by US AID and Caribou. Read our ImpactAlpha piece contextualising our insights.
ESG is driven by many stakeholders – from regulators to investors – but LPs and asset owners have a very important role to play to enforce good ESG integration given their reporting, oversight and fund allocation requirements and function. In this VentureESG white paper, funded by Luminate, we provide a first insight into LP current behaviour and plans when it comes to ESG adoption and enforcement based on 25 qualitative long-form interviews with institutional asset owners between Europe and the US.