ESG Investing for Private Equity and Venture Capital

• Focus on actual investment criteria and performance
• Comprehensive statistical analysis of results from environmental, social and governance (ESG) investment
• Insight into practical aspects of the implementation of the theory
• Thorough review of related academic research and its implications
• Perspective based on international experience in ESG
• Practical insights on ESG policy at the level of the portfolio and the financial institution

• To provide an overview of the ESG landscape and rising client expectations
• Understand emerging private equity risk, stemming from key environmental, social and governance issues relevant for across different sectors   
• Be aware of the availability, quality and challenges regarding ESG data obtained from investee venture company and third parties  
• Understand and identify key red flags of corporate-level and venture capital fund-level greenwashing
• Recognise and assess the characteristics of impact investing
• Understand how to construct an ESG fund
• Know common KPIs, as well as main challenges, for reporting on characteristics (risk and impact) of ESG investment funds

Rising expectations of ESG

• ESG market and key trends on integrating ESG in private equity and venture capital
• Latest on ESG factors and megatrends
  • Climate
  • Biodiversity
  • Circular Economy
  • Labour standards and working conditions
  • Human rights
  • Tax and tax transparency
  • Corruption
  • Data privacy
• PE and VC managers leading on ESG integration framework and consideration of ESG impact
• Market expectations of ESG PE/VC funds

 Integrating ESG in decision making

• Understanding double materiality
  • financial perspective – mitigating risk and enhancing return
  • impact perspective – funding innovation to advance solutions to social and environmental challenges
• Making sense of ESG data
  • Primary data from investee venture capital companies
  • Frameworks and datasets
• Ways to integrate material ESG issues in ESG decision making
  • Deal sourcing: screening, due diligence
  • Investment decision: investment memorandum, investment agreement
  • Ownership: data collection, targets, engagement, monitoring
  • Sale: M&A, IPO
• Exercise: Integrating climate in valuation models
• How to construct ESG and low-carbon PE portfolios, as well as impact investing
• Challenges particular to lack of standards and guidance for VCs and case studies on ways to address them
• Case study: Flagship ESG investment funds

 Greenwashing and reporting

• Identifying and avoiding greenwashing
  • Identifying greenwashing
  • Characteristics of greenwashing at social venture capital fund level
• Market expectations on ESG reporting
  • Client expectations
  • Examples of key indicators of venture capital business

The trainer is a seasoned investment professional with over 20 years’ experience in both executive and non-executive who has worked across 20 countries. For the past 4 years, he has been an independent Non-Executive Director at a large UK pension fund. He was Director of Russel Investments, and Head of EMEA on Responsible Investment, helping clients on investment strategy across public and private assets. He also worked for other large financial service firms such as GAM where he was Head of Institutional, Lehman Brothers Asset Management where he led Alternative Investment Solutions and Putnam Investments where he was Head of Consultant Relations for UK and Europe. He is a regular speaker at key investment conferences.

While an LP cannot make specific investment decisions, an LP can influence a decision-making process and engage a GP about the policies, systems and resources used to identify, assess and make investment decisions, including how ESG issues are considered. That is more and more the case as the industry increasingly becomes aware of the financial risk that ESG poses, as well as the commercial and growth opportunities that arise with sustainability megatrends.

This course will help participants understand how ESG factors impact the valuation of PE assets, and how to consider and assess how venture capital firms can contribute and benefit from offering solutions to social and environmental challenges.