Strategy & Portfolio
ESG
Environmental, Social, and Governance — criteria used by impact investors to evaluate companies beyond purely financial metrics.
ESG (Environmental, Social, and Governance) is a framework for evaluating a company's impact and behavior beyond financial performance. Environmental factors: carbon emissions, resource consumption, environmental practices. Social factors: labor practices, diversity and inclusion, community impact. Governance factors: board composition, executive compensation, shareholder rights, transparency. In venture capital, ESG has become increasingly relevant as LPs (particularly sovereign wealth funds, European pension funds, and endowments with sustainability commitments) require their fund managers to consider ESG criteria. ESG-focused VC firms specifically target companies with positive environmental or social impact. Critics argue ESG frameworks are too vague and subject to 'greenwashing' — overstating sustainability credentials.