Letter to VC Managers

This email provides an update on ESG reporting for VC fund managers in New Zealand.

Last year, several VC funds established an ESG working group to consider options for adopting an industry-wide ESG reporting framework for NZ venture-backed portfolio companies. After careful consideration, the working group has recommended the adoption of ESG_VC – an existing European ESG reporting framework that has been adapted for the NZ context.

Adopting an industry-wide framework helps to ensure that VC portfolio companies receive streamlined, realistic reporting requests that are consistent across their various fund investors. The intention is for this framework to support companies in embedding ESG into day-to-day operations whilst not impeding growth. Start-up founders and operators have so much on their plates every single day. Hopefully, aligning with a common ESG ask helps alleviate some pressure.

Within this context, the New Zealand Private Capital Association is pleased to share a collection of resources for NZ VC funds to help with rolling out ESG_VC reporting to their portfolio companies:

· ESG VC Survey one-pager – a suggested communication document for funds to provide to portfolio companies. This is a high-level guide to ESG_VC, including the rationale for adopting an ESG reporting framework.

· ESG_VC-Framework- NZ VC – 2024 – this is the industry-wide template survey that any fund can provide to portfolio companies to ensure consistency and to avoid overburdening portfolio companies. The framework is based on the international ESG_VC Framework and adapted for a New Zealand-specific context.

· MfE GHG Emission Calculator_NZ VC Version 2024 – a simplified GHG emission calculator developed based on MfE guidance/resources to help portfolio companies in calculating scope 1 and 2 emissions.

So far, Movac, GD1, Icehouse Ventures, Nuance Connected Capital, BridgeWest Ventures and Climate Venture Capital Fund have committed to rolling out ESG_VC to their portfolio companies from FY24. This group has agreed to a 31 March reporting period, so all funds wishing to conduct ESG_VC reporting for FY24 are recommended to cover the reporting period from 1 April 2023 – 31 March 2024. It is up to each fund to collect data on its own timeline, so long as the data covers the 31 March reporting period.

The New Zealand Private Capital Association is pleased to be able to support the industry in implementing an ESG framework that is suitable for the stage and scale of VC-backed companies in New Zealand.

Finally, if you have any questions please reach out to Fi Foster (Movac) or Heather Gadonniex (GD1) for more information. Heather and Fi have both worked hard over the last several months to bring this framework to life and are happy to provide guidance to other VC funds to the extent it is helpful.