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Responsible Investment


Private equity and venture capital are committed responsible investors. The focus by the industry on measuring, managing and mitigating environmental, social and governance (ESG) risks has grown substantially since the financial crisis.

What was once a reputational issue has now become a mainstay of the private equity approach – many institutional investors, as signatories to the UN Principles for Responsible Investment, now expect fund managers to be able to demonstrate a deeper commitment to ESG issues by having a coherent and structured framework in place.

ESG risks are now considered to have a material impact on investment valuation. Many private equity and venture capital houses have already recognised the value of ESG initiatives, not only in achieving environmental and social change, but also in reducing costs and minimising risks.

An in-depth introduction to Responsible Investment, why it matters, and insights on how to integrate environment, social and governance (ESG) considerations into investment strategies can be found in the Responsible Investment Toolkit, the latest iteration of the BVCA’s Responsible Investment Guides. Now online, the toolkit provides practical advice throughout the investment life-cycle, from due diligence through to exit, as well as at the house level and includes case studies, illustrating responsible investment in action.

Responsible investment is considered fundamental to value creation. Some of the best examples can be found in the winners of the BVCA Responsible Investment Awards, our platform for members to showcase their commitment and success to integrating ESG practices into their investment strategies.

ESG considerations

Most private equity and venture capital firms now seek to mitigate the Environmental, Social and Governance (ESG) risks attached to their portfolio companies. Alongside increased consideration of ESG issues at firm-level, this reflects the momentum behind Responsible Investment and sustainability amongst PE/VC fund managers, investors and wider stakeholders alike.

Sustainability issues, especially climate and other environmental considerations, have become deeply embedded in global political discourse. This has spurred policymakers and regulators to design and implement a range sustainability-related rules that affect businesses across the UK financial services industry, private equity and venture capital firms included.

The BVCA’s policy work in this area spans EU and UK legal and regulatory developments. We are working with our members and other associations to track and respond to developments in UK sustainability regulation, such as the introduction of reporting requirements based on the Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) under the UK Government’s Roadmap. We are also closely following developments EU sustainability regulation with Invest Europe and others to contribute to the development of EU rules.



Responsible Investment Guide
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BVCA Responsible Investment Toolkit


BVCA Responsible Investment Toolkit (2017)

Launched in October 2017, this online guide is an introduction to what responsible investment is, why it matters, and provides insights on how to integrate environment, social and governance (ESG) considerations into investment strategies. Practical advice is provided throughout the investment life-cycle, from due diligence through to exit, as well as at the house level, and the toolkit includes updated case studies illustrating responsible investment in action.
 

2017 - VIEW GUIDE

Responsible Investment Guide
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BVCA Guide to Responsible Investment 2015

BVCA Guide to Responsible Investment (2015)

Published in March 2015 and produced in association with PwC, this supplement to our Guide to Responsible Investment shows how private equity and venture capital-backed companies are putting environmental, social and governance policies into practice and features a series of case studies drawn from entries to the BVCA’s Responsible Investment Awards over the last two years. The supplement looks at examples from both firm and portfolio level.
 

2015 - VIEW GUIDE

Responsible Investment Guide
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BVCA Guide to Responsible Investment 2014


BVCA Guide to Responsible Investment (2014)

Published in February 2014, the BVCA Guide to Responsible Investment contains new guidance and case studies which take into account the changing nature of the responsible investment agenda, providing private equity and venture capital fund managers with a reference tool on how to manage environmental, social and corporate governance (ESG) risks and opportunities. This guide provides detailed and practical advice on how ESG factors can be managed throughout the life cycle of investments.

2014 - VIEW GUIDE

 

Further information

FOR FURTHER INFORMATION PLEASE CONTACT THE BVCA

 +44 (0)20 7492 0400

 bvca@bvca.co.uk