Sustainability aspects play an increasingly important role in the selection and management of companies. An abbreviation often used in the investment world to denote sustainability is 'ESG' (Environmental, Social & Governance). It means that factors such as energy consumption, climate, health, safety and good corporate governance are taken into account.
ESG is about finding a balance between financial economic results, transparency, social interests and the environment. There is increasing evidence that a good balance leads to better results for the company, the investors and society.
In recent years, NVP members have played an increasingly important role in the economy. This role entails social responsibility. This means that private equity and venture capital firms are increasingly accounting for sustainability in their investment selection and in the management of their firms.
Sustainability can play a role throughout the investment process - from selection to exit. Because private equity and venture capital firms are usually closely involved with portfolio companies, they have everything they need to ensure sustainable investment. Sustainability can make an important contribution to the success of companies and thus to value creation.
Many national and international guidelines, frameworks and other initiatives have been developed to bring sustainability to the attention of private equity and venture capital firms and to give them tools to integrate it into their investment process. In the Netherlands, the Responsible Investment Committee of NVP introduced a NVP ESG Award. Breakfast sessions, webinars, ESG training courses and working visits to portfolio companies have been organised to promote knowledge transfer. For example, NVP organised the NVP ESG Month in June 2021, during which we highlighted various ESG topics in webinars each week for four weeks. In addition, NVP wrote a practical guidebook, Sustainability in Private Equity: Creating value with ESG. It explains how the NVP views sustainability and what opportunities this offers, particularly in the areas of risk management and value creation. NVP also stimulates research. An interesting international initiative is B Corps, an organisation that awards certificates to companies that voluntarily comply with the highest standards of transparency and sustainability.
Do you have any ideas about sustainability or would you like to know more about the committee or about the aforementioned initiatives? Please contact Marc van Voorst tot Voorst by email firstname.lastname@example.org.