At b2venture, we use the term ‘ESG’ to describe a comprehensive set of environmental, social and governance matters impacting both our fund and our portfolio. We put these concerns at the core of our operations.
Our approach to ESG
Our practices differentiate between sustainability and impact:
External Impact defines the way in which a business model or a product generates long-lasting change, whether positive or negative, for society and the environment.
While operational sustainability refers to ESG practices within b2venture, external impact concerns the impact made through our investments into startups. In the following policy, we will henceforth differentiate between operational sustainability and external impact when describing how we operationalize respective measures. Looking at the term ESG itself, we are following a development with and by VentureESG which defines ESG across eight issue areas linked to E, S and G respectively.
Operational sustainability: internal ESG management
ESG does not only apply to how we invest and help our portfolio companies flourish and grow but it is also part and parcel of how we internally manage our firm and funds. We aim at applying the same ESG considerations and the same standards we measure our portfolio with to ourselves; being in a strong position when it comes to ESG ourselves not only makes our demands to portfolio companies more believable, it also strengthens our (economic and structural) position as a VC firm.
Being part of Leaders for Climate Action, we have been carbon-neutral since 2019 and continue to work on capturing, reducing and offsetting our carbon footprint. To further reduce our emissions, we have set up a clear travel (i.e. trains over planes, use video conferencing whenever possible).
We acknowledge the benefits of workforce diversity and therefore promote equal opportunities regardless of background, gender, disability and ethnicity as well as by providing for a safe and inclusive work environment and culture. In view of this, we have a specific DEI policy (including considerations of inclusive hiring, parental leave), Code of Conduct as well as an Anti-Harassment & Discrimination Policy in place.
With regards to governance, we have implemented several compliance and control structures. We ensure compliance with applicable laws and regulations throughout our businesses. b2venture reviews its regulatory status on a regular basis and adheres to the applicable regulation. Moreover, we have implemented strict Know-Your-Customer processes and thus ensure compliance with the Financial Markets Anti-Money Laundering Act (FM-GwG). We are committed to act according to high ethical standards to which we hold all our employees accountable.
External Impact: how we operationalize ESG in the investment process
Applying ESG principles is not only based on a comprehensive set of considerations specific to us as an investor and the startups we invest in; we also think through how ESG applies to the entire investment process from sourcing and screening to due diligence and portfolio management and exit.
There are certain business models and sectors we do not invest in which include companies whose business activity consists of:
We are committed to ensuring accessibility and diversity as core principles in the sourcing and pipeline management of our investments. We have put in place two mechanisms to make our funnel easier to access and to counteract any lack of diversity that early in the investment process:
Open application process
To counteract the need for ‘warm introduction’, we have installed a simple typeform on our website for founders to send us their pitch documentation. All applications are screened by at least one, ideally two members of the investment team.
In the process of screening and conducting due diligence on potential investment targets, ESG considerations (across the above eight sub-categories) play an important role. We are keen to understand the attitude of the founders, their approach to building their companies and any consideration of adverse impacts they might foresee early in the process and have our investment decisions influenced by these factors. The information we collect will be duly documented in our investment memos. We are using two tools in particular at this stage to probe the startups and founding team’s thinking around ESG:
Our team consists of experienced professionals who are committed to and collectively responsible for our adherence to this ESG policy in all relevant investment decisions and monitoring procedures. Where additional expertise is needed, the team will employ external resources.
Our contact persons for ESG-related issues are Johanna Junkermann and Anna Bosch.
The document was last updated on 06.09.2023.