ESG_VC is a response by the venture capital industry to the urgent social, environmental, and economic challenges that are increasingly impacting early-stage businesses.
The initiative, which has brought together some of the world’s leading VC firms, with investors spanning the UK, USA, and Europe, seeks to give entrepreneurs the tools to progress on their ESG journey.
It does this in two ways: a measurement framework for early-stage companies to benchmark their ESG performance; and an annual programme of events and resources that will provide start-ups with training and best-practice to achieve their ESG goals.
ESG_VC is governed by a Steering Committee made up of members of the VC community and the Steering Committee has engaged Social Value Portal to provide secretariat services.
Our mission is to help VCs and their portfolio companies to understand and embed good ESG practice into how they do business including the development of an ESG_VC Measurement Framework that can be used across the VC industry along with training and education material to support its implementation.
We will do this by developing and maintaining the ESG_VC Measurement Framework and by sharing our collective knowledge through regular meetings, workshops, resources and guidance documents.
ESG_VC exists to oversee the following core activities: –
- the ongoing development and upkeep of the ESG_VC Measurement Framework; and
- the development of supporting documentation and guidance to help organisations within the VC sector to address how they should embed ESG into their business activities such as policy, supply chain management and reporting; and
- develop other activities and initiatives that support the development of good ESG practices.
3.2 The ESG_VC Measurement Framework
The ESG_VC Measurement Framework has been developed by Social Value Portal (“SVP”) in consultation with the Steering Group over a period of 6 months. The ESG_VC Measurement Framework will be published in June 2021 and sets a consistent and robust standard for assessing the take up of the principles of ESG in venture-backed businesses.
3.2.1 Open Access
All intellectual property rights (“IP”) in, and any developments to (whether developed by a member of the Steering Committee or SVP), the ESG_VC Measurement Framework are, and shall be, owned by SVP (subject to paragraph 3.2.3 below). To the extent any IP in the ESG_VC Measurement Framework created by a Steering Committee member is not able to vest in SVP automatically, that member assigns to SVP any such IP. SVP will make the ESG_VC Measurement Framework freely available under a ‘creative commons’ licence https://creativecommons.org/licenses/by-nc-nd/4.0. The ESG_VC Measurement Framework can be downloaded free of charge and used by any organisation (including VCs and their portfolio companies) under the terms of this licence.
The ESG_VC Measurement Framework can be downloaded via the website www.esgvc.co.uk
Any organisations that wish to use the ESG_VC Measurement Framework for commercial use are required to contact SVP in order to agree a licence fee.
3.2.2 Upkeep and Development of the ESG_VC Measurement Framework
SVP is engaged by ESG_VC to maintain and develop the ESG_VC Measurement Framework for the benefit of the sector to ensure that it remains up to date and relevant. This arrangement may be terminated on reasonable notice by either the Steering Committee or by SVP.
The ESG_VC Measurement Framework is expected to be updated on an annual basis by SVP, who will hold the “master” version.
SVP will assign all its rights to the IP in the ESG_VC Measurement Framework (including the right to the benefit of the assignment under paragraph 3.2.1 above) to a suitable body (e.g. BVCA or the ESG VC Steering Committee in the event it is able to hold IP) to allow for the continued use and development of the ESG_VC Measurement Framework in the event:
- SVP resigns or ceases to be actively involved in ESG_VC; or
- SVP decides it no longer wishes to participate in the initiative; or
- SVP stops making the ESG_VC Measurement Framework freely available.
In the event that a suitable body is not available at the time of such assignment, the IP shall be assigned to Beringea LLP until such time as a suitable industry body can be identified.
3.3 Supporting Tools and Documentation
From time to time, ESG_VC will develop tools, guidance and information to support the broader application of ESG and help organisations to embed ESG principles more effectively into their day-to-day business processes.
All supporting documentation developed through ESG_VC is made freely available with no restrictions on use or copyright.
4.0 Governance and Decision Making
The Steering Committee will appoint a representative of one of their members to act as Chair of the Committee. The Chair shall serve for one year.
4.2 Steering Committee
The Steering Committee (SC) will comprise of up to 15 members including the Chair and SVP. The current members of the Steering Committee are listed at the ESG_VC website at www.esgvc.co.uk.
Membership of the Steering Committee will be determined and agreed by the Steering Committee and may be changed at any point in time to meet the evolving needs of ESG_VC and its agreed objectives or work programme. Appointment to, or removal from, the Steering Committee will require consent from a majority of the members.
The SC has responsibility for the development of the ESG_VC Measurement Framework, including approving any changes to the Tool and the appointment of any support and secretariat services.
4.2.2 Decision Making
The normal approach of the SC will be to seek a consensus of those present at the meeting where the matter is tabled. If this is not possible, decisions can be made by a simple majority of those present, except where the decision would entail a fundamental change to mission (as described in Section 2 above) or its governance (as described in this Section 4), in which case unanimity is required. The minimum number of members required to be present (including the chair) for decisions to be taken at a meeting is 5. The Chair shall not have a casting vote.
4.2.3 Conflicts of interest
All SC members and contributors are required to declare any actual or potential conflicts of interest as soon as they become aware of them. For these purposes a conflict of interest would be an actual or prospective activity which has the potential to impede the pursuit of the Mission as described in Section 2 and / or the individual’s ability and / or that of the organisation which the individual represents, to support the Mission, either generally or in specific circumstances; or something which creates a disincentive for the individual to support the work of ESG_VC impartially and in the best interests of initiative.
The SC can decide what action to take according to the circumstances. An individual with an identified conflict of interest may be required to be absent from certain specified discussions or meetings, or to resign from the SC altogether.
A member of the SC may withdraw from participation in the SC at any time, on notification to the Chair of the SC.
5.0 Membership and Meetings
Membership of ESG_VC will comprise 2 principal groups
- Steering Committee – up to 15 Members who will provide oversight and ultimate decision making (see section 4.2). The Steering Committee will meet at least 2 times per year; and
- Associate Members – Open to all organisations who wish to get involved and learn more about ESG VC.
5.2 Associate Members
Any organisation can become an Associate Member of ESG_VC. They will receive regular updates, invitations to workshops, training and industry events, and they may be contacted to ask to submit data from the assessment of portfolio companies using the ESG_VC Measurement Framework.
ESG_VC is a voluntary organisation, and the Members of the Steering Committee are expected to contribute their time and resources at no charge. Sponsorship and grants may be sought where appropriate by the Secretariat for ongoing support of ESG_VC Measurement Framework and general management of ESG_VC and these will be published annually by the Steering Committee.