Setting up an ESG policy is the first step to publicly communicate a firm’s commitment towards environmental sustainability, social responsibility, and good governance. The policy will to streamline sustainable operations internally and externally.
- Define the scope
- In the first section, you should define which parties commit to your ESG policy. Try not to limit yourself to your internal operations only, but also think where your policy can potentially apply on an external scale.
“We commit to following this ESG policy within our own organisation and the partners we cooperate with.
We will make an effort to encourage our partners/customers etc. to agree with our ESG policy and to commit to pursuing our ESG values. Also, we will strive to work with partners and market participants who implement such ESG values themselves, or who can at least identify with them.”
- Define your ESG values
- Environmental (more examples can also be found here):
- Minimizing environmental impact
- Promote the responsible use of resources
- Considering the environmental impact from Scope 1 (directly caused by the company, e.g. through facilities) and Scope 2 (indirectly caused, e.g. energy, electricity, waste) to Scope 3 (caused by upstream and downstream activities, e.g. business travel, transportation of the product, customers’ energy usage);
- Social (more examples can also be found here):
- DEI: integrating diverse and inclusive practices across all areas of the business (e.g. diversity of the fund or the founding teams, inclusive hiring practices)
- Team and working environment: building a strong culture and being a conscientious employer (e.g. pay gap, parental leave, living wage)
- Responsible product design: designing and building products with consideration of the ethical and human implications on the end-user and society
- Supply chain: working towards an ethical and environmentally resilient supply chain (including a Supplier Code of Conduct embracing the UN’s Global Compact) —> Respect for human rights; Support to eliminate child and forced labor
- Governance (more examples can also be found here):
- Maintain a strict anti-corruption, anti-money laundering and GDPR policy
- Promote high standards of business ethics
- Governance: having appropriate governance structures in place, according to the company’s stage (e.g. board structure, share structure); writing out a code of conduct (committing the company to high ethical standards); adopting a whistle-blower policy
- Data privacy and security: instilling a strong culture of trust, responsibility and best practice (e.g. with internal systems) around data
- Outline how you implement your ESG values
- How are you planning to implemented the above-mentioned ESG values into your daily operations?
- Take specific operational processes where your ESG values are taken into account
“In our supplier selection process, we collect relevant information on the environmental performance of each partner. This factor has the same weight in our decision as the price.”
- Name relevant memberships/partnerships
- Do you collaborate with any partners that could be named in your ESG Policy?
- Examples include LFCA, VentureESG
- Define roles & responsibilities within your organisation
- Who in your team is in charge of implementing and living up towards the ESG values? Make sure that you have a dedicated person in your team who is eventually responsible for your ESG efforts (a la ESG Officer)
“Our team consists of experienced professionals who are committed to and collectively responsible for our adherence to this ESG policy. Where additional expertise is needed, the team will employ external resources.”
- Lastly, add the person in charge of the ESG policy