Embedding impact and ESG in venture capital investing
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Journal Title
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Volume Title
School of Business |
Master's thesis
Authors
Date
2025
Department
Major/Subject
Mcode
Degree programme
Creative Sustainability
Language
en
Pages
77+1
Series
Abstract
This qualitative case study uses semi-structured interviews to explore how sustainability is embedded in venture capital. The research interlinks the two key sustainability concepts, ESG and impact, which are typically discussed separately and have been researched scarcely in venture capital context. The findings show that venture capitalists have various strategies at their disposal but in the absence of standardization, their commitments to sustainability vary widely from the minimum negative screening strategy to integrating sustainability from investment thesis to portfolio management. Individual investors, limited partners and regulators have key roles in driving the adoption. Hindering the adoption are negative perceptions, lacking understanding and skills, along with restrictive venture capital structures and regulation. To overcome the barriers and seize the unfolding new market opportunities, venture capitalists need to prioritize sustainability and build internal competence. By examining and gathering the different strategies venture capitalists use for integrating sustainability, this paper supports investors by offering a comprehensive sustainability strategy toolbox. It deepens the understanding in linking sustainability and financial aspects in this unique asset class, hopefully advancing wider market adoption.Description
Thesis advisor
Halme, MinnaKeywords
venture capital, impact investing, impact assessment, ESG, sustainability in venture capital, SFDR