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How Venture Capital Can Join the ESG Revolution

Johannes Lenhard & Susan Winterberg


In order for these efforts to become more widespread, a number of challenges must be addressed. According to the 2020 Pitchbook Sustainable Investment Survey, the most significant barriers to be overcome are a lack of clarity on how to define and measure ESG performance, a lack of ESG data on private companies, and persistent perceptions that ESG investing strategies generate lower returns. Investors have also cited a strong dislike of moving first or alone: Many GPs are waiting for industry heavyweights to move in the direction of ESG. To mainstream ESG investing in venture capital, there are several steps that need to be taken by VCs, limited partners, data providers, and regulators.



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