NEW REPORT: ESG_VC and BVCA’s new report finds environmental agenda is lagging in startups

ESG_VC is an industry initiative that help early-stage companies and their investors to measure and improve their ESG performance. The BVCA supports the initiative through acting as its data and research partner, including supporting the delivery of its annual research, published earlier this week.
Since ESG_VC was established in 2021, it has benefited from the spirit of collaboration that underpins the venture capital industry throughout the UK and Europe, and it now counts more than 200 VC firms among its members.
A critical component of ESG_VC’s work centres upon its measurement framework, developed in partnership with its members, the BVCA, and Social Value Portal. Designed to provide start-ups with a practical tool for benchmarking and improving their ESG performance, the ESG_VC Measurement Framework enables companies and investors to set targets, provide support, and track progress.
It was, therefore, encouraging to see that ESG_VC and the BVCA doubled the volume of venture-backed businesses submitting data into this year’s analysis, with 450 companies participating. The research highlighted growing opportunities and potential risks spanning the net zero agenda, diversity within start-up leadership teams, and the threat of artificial intelligence.
Key findings from the research included:
- 16% of start-ups surveyed measure their carbon footprint – an uplift of 5% on prior year – while only 1 in 20 companies has a stated net zero target and strategy.
- 60% of start-ups report having a policy or strategy to support staff with mental health, and more than 30% provide annual DEI training.
- Only 21% of companies surveyed offer staff codes of conduct on the use of AI systems and relevant training to support the responsible development of code.
The critical next step, however, is to translate these findings into action among start-ups and the venture community. ESG_VC exists to reduce the burden placed on start-ups to grapple with complex ESG topics that they often lack the time or resources to engage with.
Throughout the year, ESG_VC hosts online workshops and training sessions for start-ups and investors to learn about specialist activities such as carbon accounting, pay gap reporting, or the ethics of artificial intelligence. You will find links to these sessions in the report, or on ESG_VC’s YouTube channel.
The threat of regulation – from the European Union’s Sustainable Finance Disclosure Regulation and Corporate Sustainability Reporting Directive through to the UK’s upcoming Sustainability Disclosure Requirements – is placing more strain on the industry and greater importance on sensible reporting frameworks.
We hope that ESG_VC can help you start to think about these issues, whether you are a founder, an investor, or an adviser, and we would encourage anyone interested in learning more about how we support investors and companies on their ESG journeys to get in touch.
Henry Philipson is Director of Marketing and Communications at Beringea, a transatlantic venture capital firm, and he is co-founder of ESG_VC, an industry initiative designed to help early-stage companies and their investors to measure and improve ESG performance.
Henry Philipson
Director of Marketing & Communications, Beringea