Indonesia-focused, early-stage venture capital firm AC Ventures (ACV) in partnership with Boston Consulting Group (BCG) and with support from The Upright Project has published a report titled “Scaling Impact With Technology,” offering a numerical baseline for environmental, social, and governance (ESG) reporting in the nation’s tech scene and digital economy.
At the heart of the study is a metric known by industry practitioners as the ‘net impact ratio.’ This is a percentage score used to quantify how effectively a group of companies turns resources into positive impact. In the report, it measures how ACV and its portfolio performed in terms of ‘environment,’ ‘health,’ ‘society,’ and ‘knowledge.’
ACV’s overall net impact ratio delivered an above-average +37% with its strongest areas being ‘society’ and ‘health.’ To provide useful context, the Nasdaq Small Cap Index (NQUSS) features an average net impact ratio of +29%.
“The purpose of this debut report is to give ACV, our portfolio companies, and the tech ecosystem in general a baseline for what to report and how to report in terms of ESG and impact,” explained Lauren Blasco, Principle and Head of ESG at ACV.
“The key to creating long-term sustainable companies is through empowering founders to build companies which generate value not only for the economy but for society and the environment. By using net impact ratios, we are now able to measure value creation explicitly for society and the environment. This will be as important as financial metrics in evaluating the performance of new companies and our portfolio companies,” said Adrian Li, Founder and Managing Partner of AC Ventures.
At its core, ESG is a framework for addressing long-term risks that organizations may face in years to come. In the realm of finance and investment, it’s a fast-growing vertical, and global ESG assets are likely to exceed US$41 trillion in 2022 and US$50 trillion by 2025, notes Bloomberg Intelligence.
“Our commitment to finding and catalyzing effective solutions to pressing societal issues is at the heart of our company’s purpose. And we know we can make the greatest impact through collaboration. Through this report with AC Ventures, and with the support from The Upright Project, we hope to leverage our contribution in supporting Indonesia’s businesses on the road to achieving environmental, sustainability, and governance compliance,” said Neels Steyn, Venture Architect Director for BCG Digital Ventures.
He added, “As a market with one of the fastest growing economies in Southeast Asia, societal issues are no longer the issues of tomorrow for Indonesia, but a current challenge that needs to be addressed. The report showcases how we will be able to see more contribution towards the nation’s sustainable and inclusive economic growth by supporting equal digital access and development in Indonesia.”
To read the report in full, please visit: https://acv.vc/impact-report-2022/