Sustainability Researcher Lunch: ESG mess? On the Trajectory of ESG in Venture Capital

ESG has started to impact venture capital investors and technology startups about two years ago, especially since the advent of European regulation (especially SFDR). Based on participant observation and interviews with VCs between the US and Europe, Dr. Lenhard will outline the development of the industry's struggle with integrating ESG over years.

From its professionalized and fragmented beginnings when ESG (or even DEI) were perceived as mere distractions, we arrived at its current state of reporting and disclosure requirements mostly because of regulatory and asset owner (limited partner, LP) pressure. Not only will these requirements lead to an 'ESG mess' this year (with the first reporting under SFDR happening in Europe), its longer-term impact on actually changing investment practices is unclear. I will finish with a utopian vision of an ordered and standardized ESG for VC world, in which investors are not only ticking reporting boxes but have made ESG part of their day-to-day practices.

Dr Johannes Lenhard is affiliate lecturer and researcher at the University of Cambridge and the co-director of VentureESG. He has recently published a monograph on people experiencing homelessness in Paris (Making Better Lives), a co-authored book on diversity and inclusion in venture capital and tech (Better Venture) and his forthcoming book on the 'Ethics of venture capital investors' is under contract with Columbia University Press. He writes regular for a variety of journalistic outlets and runs the non-profit CHIRN (Cambridge Homelessness Impact Research Network).

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