Webinar: Sustainability in VC – from ESG reporting to managing impact

Impact Nexus hosted a webinar on the topic of Sustainability in Venture Capital, featuring guests Isabelle Canu from the Green European Tech fund (GET) and Teresa Bardubitzki from KfW Capital.  

In venture capital, it becomes increasingly clear that sustainability is not just about ticking regulatory boxes. It’s about active management and leveraging sustainability practices to mitigate risks and remain investible in the long term.

The webinar explored the following topics:

– Regulatory push for transparency through the Sustainable Finance Disclosure Regulation (SFDR)
– Limited Partner (LP) push for transparency and impact
– ESG performance to mitigate risks and remain investible (e.g. secure LP funding, achieve exits of companies)
– Impact performance to build attractive brands & attract funding (increasingly true for VCs & portfolio companies)
– Practitioner experiences/examples

The key goal of the webinar was for the audience to take away some key insights in terms of: What it means for them and their work? What are the developments? What conclusions can be taken away?

The key points of the webinar were:

ESG vs. Impact: One of the central questions posed during the webinar was the distinction between ESG (Environmental, Social, Governance) and impact. Isabelle offered a comprehensive explanation, clarifying that ESG is primarily concerned with risk and compliance, focusing on evaluating businesses from these perspectives. On the other hand, impact assessment delves into the positive aspects of sustainability and seeks to measure the outcomes of sustainable practices. Isabelle emphasized the need to prioritize ESG as a foundation before progressing to impact measurement and reporting.

Navigating the Regulatory Landscape: The webinar shed light on the intricate regulatory landscape surrounding sustainability. Isabelle highlighted the multitude of global standards, including the Sustainable Development Goals, United Nations Global Compact, and the Paris Climate Agreement, among others. However, the lack of coordination among these standards often leads to confusion and challenges for businesses. The significance of the Sustainable Finance Disclosure Regulation (SFDR) and the EU taxonomy for venture capital and startups operating within the European Commission’s purview was emphasized. The importance of seeking expert guidance or leveraging tech solutions to navigate this regulatory maze effectively was also stressed.

The Role of Purpose: The concept of purpose in the context of sustainability was further introduced. While ESG focuses on doing things right from a risk and compliance perspective, purpose represents the drive to do the right things. Purpose-driven ventures aim to make a positive impact and contribute to sustainability goals. By aligning purpose with ESG and impact measurement, businesses can ensure they are not only meeting regulatory requirements but also striving to make a meaningful difference.

The key drivers of momentum towards sustainability in VC: Theresa discussed the following three main drivers – 1. regulation, 2. investors and 3. soft factors, like customers and employees.

Overall, the session served as a step stone for venture capitalists, startups, and industry professionals to grasp the importance of integrating sustainability into their investment strategies, fostering a more environmentally and socially conscious approach to business.

To review the recording, click here

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