Some venture capital managers may be interested in considering ESG factors in their investments, but many are applying those considerations and improving their portfolios, according to a report released Monday by Principles. We do not have sufficient resources to influence companies and do not believe ESG is material to the asset class. For responsible investment, a United Nations-backed network of investors with over $121 trillion in assets.
PRI and VentureESG, a nonprofit that promotes ESG practices in venture capital, conducted interviews with asset owners, venture capital managers and other stakeholders in June and July 2021 . According to the paper, 104 general partner respondents were either PRI signatories or members of VentureESG. walking group. The results therefore likely overstate the extent of his ESG practice and understanding in the broader venture capital industry, the report says.
72% of respondents said they have an ESG or responsible investment policy. But few venture capital firms have dedicated ESG experts. In many cases, ESG oversight is the responsibility of his IR executive or junior members of the investment team who do not manage the investment, the report said.
Venture capital managers indicated that asset owner involvement is not seen to have a significant impact on whether they incorporate ESG considerations into their investments. However, interest in responsible investment by investee company founders could influence the adoption of ESG and sustainable investment practices by future venture capital managers, the report notes. It points out that corporations are competing for corporations, not limited partners.
GPs primarily receive information from portfolio companies on diversity, equity and inclusion, board practices and composition. Venture capital firms received twice as much information about social and governance factors as they did about environmental factors, the report said. Venture capital firms provide LPs with more information about social and governance factors than environmental factors, it said.
