ESG_VC was created in response to an increasing number of companies asking investors for help in measuring their carbon footprint, building an inclusive work culture, and finding solutions to the ethical implications of artificial intelligence. It now exists to help early-stage companies and their investors to measure and improve their ESG performance.
The annual report contains data collected by 16 venture capital firms using the ESG_VC Measurement Framework and is analysed by the BVCA research team. It features the submissions of 450 companies, twice as many as featured in their previous report. And, in an effort to support early-stage companies, identifies common areas of strength and weakness in the integration of ESG factors into business models.
Looking at the data, companies require greater support in implementing net-zero agendas and dealing with the ethical consequences of artificial intelligence; however, early-stage companies succeed on social issues such as mental health and inclusion. Some of the key findings on each element of ESG include:
‘Environmental’
- 16% of early-stage companies measure their carbon footprint
- 11% of early-stage companies use offsetting tools or initiatives
- 5% of early-stage companies have a net-zero target and strategy in place
‘Social’
- 60% of startups have a policy to support staff with their mental-health and well-being
- 33% of startups provide DEI training
- 39% of startups have a recruitment programme designed to reach people from diverse backgrounds
‘Governance’
- 21% of early-stage companies have adopted a formal ESG policy
- 19% of early-stage companies currently have sustainability as a regular item on their board agenda
- 61% of early-stage companies have a corporate code of ethics is place