UK VC ESG data harmonisation project seeks to support Mansion House pledges, emulate European success

The British Business Bank, VentureESG and the British Private Equity and Venture Capital Association (BVCA) have launched a project to reach an agreement on the ESG datapoints that venture capital (VC) managers should report to their institutional investors.

The three organisations plan to convene institutional LPs with venture capital portfolios in the UK to come to a consensus on the reporting requirements.

Industry bodies in the EU have already developed an ESG data harmonisation template, and the UK initiative intends to coordinate with and learn from their experience.

“The success of the Invest Europe template and the harmonisation process we supported last year is enormous,” said VentureESG chief executive officer Johannes Lenhard.

“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.”

Another consideration is the needs of UK defined contribution (DC) pension funds that, under the Mansion House Accord, have pledged to invest a portion of their default funds into private markets, including VC and growth equity.

“This project will shape expectations of ESG integration and reporting that meet the needs of LPs and help prepare GPs for the opportunities the Mansion House Accord could bring,” the British Business Bank and its project partners said in a statement.

The Bank is working to create a ‘British Growth Partnership’ fund to crowd in investment in some of its VC pipeline.

According to research from ESG_VC and the BVCA, VC-backed businesses in the UK lead comparative countries in their reporting. They found that 26% of UK start-ups measure their carbon footprint compared with 23% in Europe and only 8% in the US.

The latest digital edition of IPE’s magazine is now available