We don’t agree that startups are too early to think about or report on ESG. As a company builder, we believe we have a unique opportunity, and therefore a duty, to support companies to have ESG as part of their DNA from day 1.
We believe that all companies should be in control of their actual and potential impact: monitoring and managing negative impact and maximizing positive impact. With a scope and a framework appropriate for their stage, companies will monitor and improve not only the teams’ impact, but most importantly the impact of their products and services on community, the environment and wider society.
The importance of ESG is fundamental, and its effect is now binary: either we build resilient businesses that contribute to our future, or we build businesses that won’t survive as they will lose their “license to operate”.
ESG is, in fact, a prerequisite for a company to exist at all. Early stage investors like us have the responsibility to support founders to future-proof their businesses while there is still time. In 2030 this will be hygiene level, and the market won’t be so kind.
Content from our ESG framework.
To provide you with context and support to navigate the fast evolving ESG legal and societal landscapes, we invite you to read the content we have shared and will share below. Here we’ll provide practical guidance and materials to help startups and small businesses navigate how to start to execute on their ESG agenda.
Wellstreet promotes environmental and social characteristics, in accordance with article 8 of the SFDR. Our funds and investment vehicles invest in companies that have a net positive impact on environmental, social and corporate governance aspects throughout their value-chains. By doing this we can together drive development step by step in the right direction. We don’t agree that startups are too early to think about or report on ESG. As a company builder, we believe we have a unique opportunity, and therefore a duty, to support companies to have ESG as part of their DNA from day one.
The ESG framework takes the holistic view that sustainability extends beyond just environmental issues and that it is critical to businesses’ long term viability and success. With a scope and a framework appropriate for the portfolio’s stage, and with the right focus, our companies can monitor and improve not only the teams’ impact, but most importantly the impact of products and services on community, the environment and wider society, throughout their lifetimes.
"As an investor, we believe we have a unique opportunity, and therefore a duty, to support companies to have ESG as part of their DNA from day one. By doing this we give our companies context and support to navigate the fast-evolving ESG legal and societal landscapes. As fund managers we provide practical guidance and materials, and that way we ensure we drive change towards a sustainable future." - Jessica Rameau, Partner & Fund Manager - Wellstreet
Establishing an ESG Board
How to perform a sustainability risk assessment
Running an ESG training workshop for portfolio companies
ESG 1.0 is dead. Welcome to ESG 2.0
OP-ed from Dagens Industri: ESG is dead. Long live ESG!
Legislations, frameworks & standards that our portfolio handbook is based upon;
ESG stands for Environmental, Social, and Governance. Investors are increasingly applying these non-financial factors as part of their analysis process to identify material risks and growth opportunities.
Article 6, 8 or 9 Fund
According to the SFDR’s (Sustainable Financial Disclosure Regulation) classification system, a fund will either be classified as an article 6 ,8 or 9 fund – depending on their characteristics and level of sustainability: Article 6: Funds without a sustainability scope. Article 8: Funds that promote environmental or social characteristics (light green). Article 9: Funds that have sustainable investment as their objective (dark green).
The Sustainable Finance Disclosure Regulation (SFDR) is an EU regulation that aims to enhance the transparency and integrity of the financial sector's sustainability-related activities. It requires financial market participants to disclose information on the sustainability risks of their products and services, as well as their policies for managing and mitigating those risks.
Principal Adverse Impacts (PAI) is a key concept in SFDR. PAI is the negative, material or likely to be material effects on sustainability factors that are caused, compounded by or directly linked to investment decisions and advice performed by the legal entity.
The Swedish Annual Accounts Act (AAA) is a national law that contains provisions on the preparation and publication of annual accounts, consolidated accounts and interim reports.
Global Reporting Initiative (GRI) is an independent, international organization that provide the most used standard for sustainability reporting (the GRI Standards). It helps businesses and organizations to understand and communicate their impacts on issues like climate change, human rights and corruption.
Non-Financial Reporting Directive (NFDR) is a EU directive on sustainability reporting. This is now being updated, and the new name is Corporate Sustainability Reporting Directive (CSRD). The new directive will result in that more companies will be required to report on sustainability, the report to be reviewed of a third-part and companies will have to report on common EU standards.