In December, we announced our partnership with ImpactNexus to offer founders an ESG and impact reporting. In a first webinar, ImpactNexus has now presented our investors the methodology and the practical application of the evaluation of companies.The topics of ESG and impact are closely linked in the ImpactNexus software but divided into different modules. The ESG assessment was developed by the company based on international standards. It focuses on the subjects that may have a significant financial impact on the business. This happens, for example, through regulations such as the Sustainable Finance Disclosure Regulation (SFDR) or a change in consumer needs. Among other things, the measures taken by the company to protect the climate or the company’s own diversity are queried (see Figure 1: ESG assessment PDF overview).

The impact topic is more comprehensive: The focus is on the positive or negative effect that a company creates with its products or services. Building on logics used by venture capital funds and the European Investment Fund, companies can set impact goals in the ImpactNexus software. These describe the desired effects both qualitatively and quantitatively.In coordination with its investors, companies can set tangible goals, classify them according to international systems such as the Sustainable Development Goals (SDG) and continuously measure the degree of goal achievement (see Figure 2: Impact profile of a start-up). Investors can use the reports to make better investment decisions and to continuously track target achievement of their portfolio companies. 

In addition to these advantages, the ImpactNexus team wants to make sustainability more tangible and measurable for young companies. The ESG assessment increasingly provides start-ups with tailor-made suggestions for improvement, helps to define corporate sustainability measures, and anchor them in the company.

As part of our partnership, the startups registered with encourageventures are enabled to transparently show their ESG and impact reporting to investors in our network and further investors.