{"id":4565,"date":"2021-05-24T23:18:45","date_gmt":"2021-05-24T21:18:45","guid":{"rendered":"https:\/\/silta.es\/juantatay\/?p=4565"},"modified":"2021-05-24T23:18:45","modified_gmt":"2021-05-24T21:18:45","slug":"solving-vcs-esg-puzzle-by-gabekleinman","status":"publish","type":"post","link":"https:\/\/silta.es\/juantatay\/solving-vcs-esg-puzzle-by-gabekleinman\/","title":{"rendered":"Solving VC\u2019s ESG Puzzle, by @gabekleinman\u00a0"},"content":{"rendered":"

The reason VC\u2019s are gaining ESG altitude is simple: institutional investors and family offices are now leaning in.<\/p>\n

Origen: Solving VC\u2019s ESG Puzzle. Upstream investment strategy remains\u2026 | by Gabe Kleinman | May, 2021 | World Positive<\/a><\/em><\/p>\n

Environmental, Social, and Governance (\u201cESG\u201d) standards are having a moment with climate change (and climate risk), broad socioeconomic disparities, and questionable corporate behavior in the zeitgeist. Talented employees (in a tight labor market) and consumers (in a crowded landscape) care more deeply about matters related to ESG unlike any time in our lifetimes.<\/p>\n

As a result, many top tier firms have launched dedicated impact funds tied more closely to ESG metrics (see: TPG Rise, Bain Double Impact, 500 Startups, KKR, Blackstone, and more). \u2026<\/p>\n

Here are five ideas on how to get out of the ESG woods and focus on measuring what matters:<\/p>\n

\n
<\/div>\n<\/figure>\n

1\/ \u201cKISS\u201d Investment Criteria<\/em><\/strong>
\n<\/em>It is becoming increasingly clear that startups tackling big problems, especially environmental and social, are outperforming their peers for two reasons: new market opportunities and risk mitigation. Through a Keep-It-Simple-Stupid (KISS) approach in addition to the basics of venture investing (e.g. tech, team, timing, total addressable market), an investment team can elevate its ESG game by evaluating risks and rewards in sourcing practices, pitches, and committee meetings. \u2026<\/p>\n

2\/ Focus On Solving Big Problems, Then How To Do It<\/em><\/strong>
\nWhile there\u2019s always risk<\/a> in looking exclusively at the big vision, it\u2019s where ESG can be center stage instead of being delegated exclusively to non-investment professionals, post-investment. Diving too deeply into ESG within the upfront screening or diligence processes can also create unnecessary friction \u2026<\/p>\n

3\/ Seeding Best Practices & Optional Measurement <\/em><\/strong>
\n<\/em>Building a company from scratch is hard, <\/strong>and piling on ESG reporting requirements for early-stage companies can be non-trivially distracting to the mission instead of directly serving it. Additionally, a company with less than ten employees can\u2019t effectively answer most questions on any impact assessment, nor should they have to. \u2026<\/p>\n

4\/ Be Intellectually Honest & Seek the Truth
\n<\/em><\/strong>There is a yearning to make this all simple and standardized, but the truth is these are nuanced debates with webs of tradeoffs that all point back to the investment team. I\u2019ve witnessed recent examples of firms with rigorous ESG standards backing companies in others\u2019 exclusionary categories, like alcohol and firearms \u2014 justifying the investment on the grounds that the company scores well on ESG tests. \u2026<\/p>\n

5\/ Choose Your Benchmarks, Let The Market Decide.<\/em><\/strong>
\n<\/em>Finding the right benchmarks and evaluative tools requires a little experimentation here. Doing so by evaluating your own management company as a start can go a long way \u2014 helping to build empathy, earning credibility, and helping build a depth of understanding regarding what makes sense for you. \u2026<\/p>\n","protected":false},"excerpt":{"rendered":"

The reason VC\u2019s are gaining ESG altitude is simple: institutional investors and family offices are now leaning in. Origen: Solving VC\u2019s ESG Puzzle. Upstream investment strategy remains\u2026 | by Gabe Kleinman | May, 2021 | World Positive Environmental, Social, and Governance (\u201cESG\u201d) standards are having a moment with climate change (and climate risk), broad socioeconomic […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[28,32,26,214,5,163,303,46],"tags":[305,219],"class_list":["post-4565","post","type-post","status-publish","format-standard","hentry","category-cosillas-empresariales","category-economia","category-el-critico-como-artista","category-entrepreneurship","category-financial","category-funding","category-investors","category-start-it-up","tag-investors","tag-startups"],"jetpack_featured_media_url":"","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/silta.es\/juantatay\/wp-json\/wp\/v2\/posts\/4565","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/silta.es\/juantatay\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/silta.es\/juantatay\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/silta.es\/juantatay\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/silta.es\/juantatay\/wp-json\/wp\/v2\/comments?post=4565"}],"version-history":[{"count":1,"href":"https:\/\/silta.es\/juantatay\/wp-json\/wp\/v2\/posts\/4565\/revisions"}],"predecessor-version":[{"id":4566,"href":"https:\/\/silta.es\/juantatay\/wp-json\/wp\/v2\/posts\/4565\/revisions\/4566"}],"wp:attachment":[{"href":"https:\/\/silta.es\/juantatay\/wp-json\/wp\/v2\/media?parent=4565"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/silta.es\/juantatay\/wp-json\/wp\/v2\/categories?post=4565"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/silta.es\/juantatay\/wp-json\/wp\/v2\/tags?post=4565"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}