With our #ESGinVC initiative, we want to foster a discussion around ESG and help each other develop and improve our frameworks. As part of this initiative, we spoke to leading managers and LPs about their ESG frameworks. The long-form interviews will be published in a reader on our website, while we will regularly post interview extracts on our social media channels (Linkedin — Twitter — Medium).
The interview below is with Oksana Stowe, Partner at Redrice Ventures.
Previous interviews include: Kinga Stanislawska (Experior VC, European Women in VC), Miki Yokoyama (Tech Founders), Fabian Heilemann (Earlybird, Leaders For Climate Action), Kanyi Maqubela (Kindred Ventures), David Teten (Versatile VC).
How do you tackle ESG responsibility at Redrice Ventures?
We at Redrice employ ESG as an investment factor and there is no doubt in our minds that environmentally-and-socially responsible companies will outperform in the decades to come. We are also fully aware that until ESG reporting standards become ubiquitous and obligatory, investing based on ESG principles among other key variables will always be part science, part guesswork. The companies we back all focus on adopting responsible business practices that contribute to a more sustainable and inclusive world and we as a team are committed to use our network and expertise to help our portfolio companies to adopt and implement these practices.
Do you monitor specific ESG metrics? Can you provide some examples?
We are at the start of our journey to find the right approach to this. After an extensive search of the market, we have partnered with Lepere Analytics ESG Audits, which was started by Marc Lepere, a researcher at King’s College London. The team has developed a set of metrics to perform an annual ESG audit on seed stage startups. They have narrowed down over 400 Refinitiv Eikon measures and re-designed them to be applicable for young companies.
there is no doubt in our minds that environmentally-and-socially responsible companies will outperform in the decades to come.
The metrics are quantifiable and combine to create an ESG scorecard which allows us to monitor annual performance and progress against all of the ESG components. The ESG audit is conducted by certified auditors and focuses on verifying the sources of inputs from which the scorecard is compiled, for example electricity and water bills to demonstrate usage, pay slips to verify wages, customer complaints to understand product quality issues. Once the source data is audited, the scorecard can be compiled.
Can you tell us more about this partnership with Lepere Analytics ESG Audits and what you learnt so far?
Marc’s Doctoral research at King’s likens the current state of ESG reporting to annual reporting before the Wall Street Crash of 1929. Learning from the evolution of annual reporting, the Lepere team set out to develop standardized, quantifiable, evidence-based measures that can be independently audited in much the same way as financial reporting.
“…while ESG data is important, tangible outcomes for companies need more than just data”
We have worked together with them to help tailor the set of ESG measures to young and evolving companies, which took a few iterations. We also had to remind ourselves that while ESG data is important, tangible outcomes for companies need more than just data. The scorecard forms a management tool to drive performance and because it’s independently audited, it helps young companies to set the right foundation at the very beginning.
You invest mostly in the consumer and premium space. What in your opinion are the biggest levers to make this industry more sustainable and ethical?
I think the most obvious lever is consumers themselves, who will continue to pressure brands and retailers to embrace sustainability and good governance practices. Consumers want to know about the origins of what they buy. Now they have increased their focus on health and safety and are showing strong support for the businesses in their local communities.
“…there is no one-size-fits-all solution in our quest to be kinder to planet and people.”
Customer love and loyalty are especially important for premium brands and being tone deaf to these trends is no longer an option for large and small companies in this space. As Warren Buffet said “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
Have you talked about ESG responsibility with your fellow LPs? What are their perspectives and how are they different from yours?
It is not news that a greater proportion of LPs – institutional, family offices and even high-net-worth individuals – are factoring ESG considerations into their due diligence process. Many of them recognize that everyone is learning and that there is no one-size-fits-all solution in our quest to be kinder to planet and people. And that there is no single solution to solve it all. However, there is an increased focus among LPs on reporting based on concrete measures, rather than generic policies and soft narratives.
About Oksana Stowe
Oksana, partner at Redrice, is an investor in purpose driven brands and related technology companies. Her experience ranges from working with very early stage to growth-stage ventures, such as Huboo, Shameless Pets, Unmind and many others. She has been lucky enough to work and live across various geographies with significant experience in the US, Western and Eastern Europe.
Linkedin — Twitter
About Redrice Ventures
Redrice Ventures provides capital, advice and connections to early-stage businesses. Redrice is a high conviction, anti-hype investor, seeking companies with a sustainable differentiation. The fund initially invests at seed stage, with the ability to support founders through the entire entrepreneurial journey and is partnered with a collection of highly respected European entrepreneurs.
About Marco Cesare Solinas
Marco is an Analyst at Blue Future Partners, where he is responsible for sourcing and analysing new investment opportunities. He is passionate about Technology and Venture Capital and making an impact with investments. He focuses on both direct and indirect investments.
Previously, he has built an international and multicultural background across Italy, US, Germany, Turkey and Malaysia. Marco holds a CEMS Master’s in International Management and a Bachelor´s in Economics and Finance from Bocconi University.
Linkedin — Twitter — Medium
About Blue Future Partners
Blue Future Partners is a Fund of Funds with decades worth of experience in investing in Venture Capital. We specialize in backing Emerging Managers focused on early-stage technology investments. We are people-centric and relationship-driven. We have a global mandate and existing relationships with Emerging Managers in the US, Europe, Israel, China and South East Asia.
Website — Linkedin — Twitter — Medium