The Business Case for Venture Capital ESG

The Business Case for Venture Capital ESG

Johannes Lenhard

ESG & VC Specialist

We know that different stakeholders are pushing ESG for numerous reasons and that attitudes can vary. But the question at the core of this is simple: does implementing ESG in venture capital investing and portfolio companies make financial sense? Join Johannes Lenhard as he explores whether ESG contributes to the financial success of investors.

We know that different stakeholders are pushing ESG for numerous reasons and that attitudes can vary. But the question at the core of this is simple: does implementing ESG in venture capital investing and portfolio companies make financial sense? Join Johannes Lenhard as he explores whether ESG contributes to the financial success of investors.

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The Business Case for Venture Capital ESG

7 mins 10 secs

Overview

Does implementing ESG in venture capital investing and portfolio companies make financial sense? The Harvard Law School Forum on Corporate Governance argues that companies and investors “have become too short-term oriented in their investment horizon, leading to decisions that increase near-term reported profits at the expense of the long-term sustainability of those profits.” Likewise, ESG factors are a good proxy for the longer-term health of a business. While companies that integrate ESG factors into their decision making have indeed been found to outperform the stock market, this is only true for those who focus on material ESG factors (e.g. waste reduction for a car company). There is also pressure from consumers and employees who are increasingly pushing for ESG.

Key learning objectives:

  • Understand the business case for ESG in VC

  • Outline how ESG affects revenue and operations

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Summary
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Expert
Johannes Lenhard

Johannes Lenhard

Johannes teaches and researches homelessness and the social science of venture capital at the Max Planck Cambridge Centre for Ethics, Economy and Social Change at the University of Cambridge. Johannes is also a co-founder of the not-for-profit VentureESG, a global community of almost 300 VC funds and asset owners committed to advancing ESG practises in VC.

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