ESG

ESG For Early-Stage Startups

In the world of startups, incorporating policies and practices for environmental, social and governance (ESG) issues is often seen as something for later-stage startups. We challenge that notion.

We believe that it’s far easier and more effective to integrate ESG from the beginning, making the next generation of unicorns or Fortune 500 companies more diverse and inclusive, more conscious of their employees' health and safety, and better serve their communities and the environment.

What is ESG?

Environmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that 500 Startups latest global flagship fund is integrating into its investment analysis and decision-making and portfolio management processes.

Environmental criteria consider how a company performs as a steward of nature.

Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates.

Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.

Getting Started With ESG

A Guide for Early-Stage Startups that mitigate ESG risk create a sustainable culture, which can help attract both investors and customers.

Learn how to get started with ESG in this guide.

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ESG 2020 Annual Report

500 Startups focuses on ESG and responsible investing because we recognize the potential impact of startups on the environment, workers, communities, and society in the future.We integrate ESG into our investment strategy through a three-stage process that involves screening, investment, and monitoring and reporting.This is our first report for our global flagship Fund V.

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The Global Flagship Fund ESG Policy

The purpose of the ESG Policy is to ensure that the Fund takes a responsible approach to investment throughout its investment cycle and recognizes the potential impact of its companies on the environment, workers, communities, and society, as well as the potential impact of climate change on the companies in which the Fund invests.

Specifically, the policy helps the Fund to:

  • Account for material risks and potential opportunities which may make the business more or less attractive for investment.
  • Advise companies on ESG value creation opportunities.
  • Encourage the building of diverse and inclusive teams.
  • Contribute to the achievement of the UN Sustainable Development Goals

The Global Flagship Fund ESG Investment Process

This begins with a pre-selection questionnaire to evaluate whether companies are operating in line with UN Global Compact Principles. Questions range from labor rights and gender equality to environmental impact and anti-corruption practices to the treatment of indigenous people. 

The Global Flagship Fund appointed an ESG specialist and the investment team will recommend tools and training and nominate mentors to work directly with select companies to inspire ESG materiality policy and build opportunities. Such portfolio company’s ESG status will be documented, including annual updates to company responses to the screening questionnaire.

500’s ESG specialist will also be responsible for maintaining and updating reporting systems and training. The ESG specialist will develop quarterly education modules on key ESG topics to include mentors, speakers, and tools. The ESG Specialist will also publish an annual ESG report.

ESG

Resources for Startups

Looking to better understand the ramifications of ESG policy for your early-stage startups? Check out our list of resources.

Standards, Frameworks, Certification

These are the main frameworks and standards from top organizations on the subject like the United Nations.

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Environmental Criteria

Check out these resources to help startups become more energy efficient, reduce waste, and be more mindful of how their business affects the environment.

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Governance

Resources to help early-stage startups understand and incorporate policies around board composition, as well as, anti-bribery and anti-corruption mechanisms.

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Social Criteria

From data protection and privacy to gender and diversity and more, these resources are to help address a variety of societal issues that may be affected by your startup.

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ESG Webinars And Content

ESG for Early-Stage Investing:Accelerating Responsible Venture Capital


Watch video → read story→

Beyond Disruption: How Tech Startups Can Shape the Gig Economy

Alex Rosenblat, Author

Uberland: How Algorithms Are Rewriting the Rules of Work

READ STORY →

Why Responsible Tech is a Business Imperative

Lyel Resner, Adjunct Professor of Public Interest Technology and Social Innovation

at NYU and a Fellow at the MIT Civic Data Lab, Co-Founder of Swayable (YC W18)

WATCH VIDEO → READ STORY →

This page is intended solely for general informational or educational purposes only. All third party links on this page have not been independently verified by 500 Startups and the inclusion of such links should not be interpreted as an endorsement or confirmation of the content within. Under no circumstances should any content in this post be construed as investment, legal, tax or accounting advice by 500 Startups, or an offer to sell or solicitation of interest to purchase any securities advised by 500 Startups. Prospective investors considering an investment into any 500 Startups fund should not consider or construe this content as fund marketing material.