A consortium of investment bodies including British Business Bank, VentureESG and the British Private Equity and Venture Capital Association (BVCA) are launching a joint data reporting template to align ESG reporting between GPs and VC-backing LPs.
As more fund strategies focus on sustainability and responsible innovation, limited partners will have a greater emphasis on ensuring investments meet ethical standards.
The new VC ESG reporting template aims to reduce the administrative burden on investment funds and the portfolio companies they back with increased convergence in investor reporting requirements and a combined dataset of UK VC ESG data.
This will be particularly important following the recent Mansion House Accord that saw 17 of the UK’s largest pension schemes agree to invest a proportion of their funds into venture capital and growth equity markets.
With an influx of assets and partners to venture capital, the consortium said its project will shape expectations of ESG integration and reporting to meet the needs of LPs.
“Channelling more investment into venture and growth equity will be vital to build the exciting and innovative companies of the future that will help drive economic growth,” said BVCA chief executive Michael Moore.
“This new data harmonisation project will help LPs and GPs to come to a consensus on reporting requirements, ensuring that investors get the information they need and small firms and managers are not unduly burdened with disproportionate reporting requirements.”
VentureESG, chief executive Dr Johannes Lenhard added: “The success of the Invest Europe template and the harmonisation process we supported last year is enormous; the ESG reporting burden among almost all startups in Europe has decreased year over year – which frees up time to do the real work. That is what we want to achieve in the UK with this new project.”
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