ESG & Impact

The role of sustainability aspects in the selection and management of companies is getting increasingly important. In the world of investment, a term often used for sustainability is ‘ESG’ (Environmental, Social & Governance). It means that factors like energy consumption, climate, health, safety and good governance are taken into account. 

ESG has to do with looking for a balance between financial-economic results, transparency, social interests and the environment. There is an increasing number of indications that a good balance leads to better results for the company, the investors and society.

In the past few years, the role of NVP members in the economy has grown increasingly. This role also involves social responsibility. This means that venture capital companies have to take sustainability into account in their investment selection and in the management of their companies.

Sustainability can play a role in the entire investment process, from selection to exit. Since venture capital companies, as a rule, are closely involved in portfolio companies, they have everything required for sustainable investment. Sustainability can contribute considerably to the success of companies and therefore to value creation.

Many national and international guidelines, frameworks and other initiatives have been developed to make venture capital companies focus on sustainability and provide them with possibilities to integrate this with their investment process. In the Netherlands, the Responsible Investment Committee of the NVP has established an annual NVP ESG Award. Breakfast sessions, webinars, ESG training and working visits are organised in portfolio companies to promote knowledge transfer. In June 2021, the NVP organised the NVP ESG Month, in which we discussed various ESG topics in webinars every week for four weeks. Additionally, the NVP has drawn up a practical manual Sustainability in Private Equity: Value Creation by ESG, in which an explanation is provided of how NVP looks at sustainability and the opportunities this offers, especially with respect to risk management and value creation. The NVP also encourages research. An interesting international initiative is B Corps, an organisation that issues certificates to companies that voluntarily seek to comply with the highest standards on transparency and sustainability. 

If you have any ideas about sustainability or if you want to know more about the committee or the initiatives above, contact Marc van Voorst tot Voorst via vanvoorst@nvp.nl.