Implementation
Section 2 | BVCA Responsible Investor Toolkit
The ESG Strategy sets the ambition and vision of the firm from an ESG perspective, including in terms of positioning within the market over time. It should be materiality-focused and will consider stakeholder expectations (current and future), the company’s operational objectives, compliance risks, and benchmarking against industry peers. If embedded into the heart of the investment philosophy and throughout the investment cycle, it is a force for value creation in addition to being a risk mitigation tool.
The ESG or Responsible Investment Policy underpins the strategy and articulates the firm’s ESG commitments, governance and implementation arrangements. An ESG policy should be aligned with the organisation’s investment strategy and set out its commitment to comply with all relevant legislation, to continuously improve across each of the pillars of E, S and G, and may set out (if required) how it will exclude investment into certain asset classes/geographies.
When developing an ESG Strategy for your fund there is a ‘no one size fits’ all approach. A firm’s ambition, as well as its maturity and current status on ESG, will influence the shape of its own ESG Strategy and, consequently, its management framework.
Some GPs are likely to already be considering some ESG matters in their operations and investments, however, this may be more ad-hoc than systematic. Building on what your firm is already doing, while taking a more strategic approach to ESG management, can help maximise opportunities.
Useful Resources
- Responsible investment in private equity | Principles for Responsible Investment – various resources and insights published by PRI.
- ESG reporting template - ESG reporting standards guide | Invest Europe – ‘Bringing together key ESG reporting frameworks relevant for European (PE/VC) investors today, this Invest Europe GP-LP ESG reporting template aims to facilitate ESG data collection and reporting to LPs and includes reporting recommendations comprising a set of key ESG aspects and metrics’.
- How to write an ESG policy for a VC fund - a practical guide | VentureESG – Top tips and step by step guide by VentureESG on how to develop an ESG Policy, with through a VC lens.
Top Tips
How to define your ESG strategy?
- Start by reviewing what is already in place, do not reinvent the wheel!
- Consult with your stakeholders to align your ambitions with their expectations.
- Ensure senior buy-in – pave the way to successful implementation by involving senior management early in the process.
- Review strategy/policy regularly to ensure it is still relevant and in alignment with the organisation's investment approach and positioning.
Triton’s aim is to build better businesses. Our strategy is to invest in companies that we feel are fundamentally sound but face specific challenges that we can help to solve. ESG issues such as climate change, resource scarcity, digitisation and supply chain sustainability present clear risks and opportunities for us and our portfolio companies. We work in partnership with our portfolio companies to drive positive change by sharing knowledge and gaining from each other’s expertise and experience. Better businesses will play a crucial role in a sustainable world, and ESG is a critical element of Triton’s toolkit for building them.
Explore other sections in the Toolkit
Monitoring & Reporting
Section 3 | BVCA Responsible Investor Toolkit
The VC Perspective
Section 4 | BVCA Responsible Investor Toolkit
ESG Knowledge Hubs
Section 5 | BVCA Responsible Investor Toolkit