Invest Europe, the association representing European private equity, venture capital (VC) and infrastructure sectors and their investors, has updated its ESG reporting template to include a component tailored for seed and early-stage VC fund managers and their portfolio companies.
The new version also adopts a proportional approach that gradually increases reporting expectations across three stages; there is now a “minimum” reporting template in addition to the pre-existing “recommended” and “full” templates.
The changes were introduced in part to recognise how the needs of VC fund managers with seed or early-stage strategies differ from more mainstream investors due to the maturity of their portfolio companies and/or lack of data points.
Invest Europe said the revised guidance has been endorsed by leading investors, including the Sixth Swedish National Pension Fund (AP6), a private equity specialist, KfW Capital, and Tesi.
Jörg Goschin, co-chief executive officer of KfW Capital, said the updated template aligned with the requirements of major European limited partners (LPs), “enhancing the consistency and quality of ESG data across the industry”.
“By streamlining reporting processes, it reduces the burden on funds and on portfolio companies, while promoting greater transparency and accessibility of ESG data in the market,” he added.
Anna Grgic, ESG integration manager at AP6, told IPE that the pension fund “supports the continued convergence of ESG reporting requirements and questionnaires in the market, with an aim to increase efficiencies and unlock resources for value creation efforts in private equity and venture capital portfolios”.
The new template was developed in close collaboration with VentureESG.
In addition to being updated to accommodate the smaller end of the market, it was also reviewed to enhance alignment with European Union ESG reporting legislation, like the sustainable finance disclosure regulation (SFDR), and to ensure continued alignment with existing industry initiatives such as the ESG Data Convergence Initiative.
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