PAKCon 2020: ESG , Impact Investing and how it affects VC-backed Companies

TL;DR

This session discusses the increasing importance of sustainable and impact investment in the startup world.

Transcript

thanks for joining the session today which is about an increasingly hot topic in the startup world it's about sustainable and impact investment and i'm very happy that fabia and joelle from smp are with us today and give us some insights they both advise venture to capital and buy out and fund or funds on fund structuring and fundraising so very ha... Read More

Key Insights

• 🌍 Public funding, regulation, and market demands are the main forces driving VC funding towards sustainability in the startup world.
• 🪡 Startups need to align with general ESG requirements and consider their social and environmental impact to attract VC investments.
• 👨‍💼 Negative ESG effects within a business model can create challenges in accessing financing.
• 🏤 Non-European startups can tap into European funding programs to attract impact investments.
• 👓 VCs are motivated by a mix of intrinsic values and market demands to prioritize ESG metrics and sustainable investments.
• 📔 Extensive disclosure requirements will be imposed on startups seeking VC funding, covering various aspects of sustainability.
• ⛔ The focus on sustainable investments is not limited to impact VC funds; conventional VCs are also increasingly considering sustainability.

Questions & Answers

Q: How can non-European startups attract impact investments for environmentally friendly markets?

Non-European startups can explore funding programs and initiatives at the European level that aim to support greener investments abroad. The focus on sustainable funding is not limited to Europe, and there are opportunities for non-European startups to attract impact investments.

Q: What motivates VCs to prioritize ESG metrics and sustainable investments?

The motivation can come from both intrinsic values and market demands. Some VCs are genuinely committed to making a positive environmental and social impact. Others are driven by investor demands and the changing market landscape, where sustainability is becoming increasingly important.

Q: How extensive are the disclosure requirements for startups seeking VC investments?

VC funds will require startups to provide extensive information on sustainability risks and ESG effects throughout the investment period. This can include aspects such as carbon footprint, energy consumption, gender diversity, and human rights. Due diligence on these aspects will be crucial for startups seeking VC funding.

Q: How do public funding, regulation, and market demands influence sustainable investments?

Public funding, regulation, and market demands collectively drive VC funding towards sustainability. Public money is increasingly expected to be earmarked for sustainable investments, and regulation mandates disclosure of sustainability risks. Market demands are also pushing for sustainability, with both conventional VCs and impact VCs competing for and investing in startups generating social and environmental impact.

Summary & Key Takeaways

• The session explores the topic of sustainable and impact investment in the startup world.

• The speakers discuss the drivers behind this trend, including public funding, regulation, and market demands.

• They emphasize the need for startups to align with general ESG requirements, consider their social and environmental impact, and address any negative ESG effects.