Download Energize’s 2021 Annual Impact & ESG Report here.
In an important milestone for our firm, we are excited share Energize Ventures’ 2021 Annual Impact & ESG Report publicly for the first time. Energize invests in software solutions at the intersection of digitization and sustainability. As a financial-first investment manager, we strive not only to yield strong financial returns but also to accelerate the clean energy and sustainability transition. Our investment focus has always inherently aligned with impact; however, we believe that by more actively managing this impact and prioritizing Environmental, Social and Governance (ESG) issues, we strengthen our firm, add value to our portfolio and help scale the next generation of sustainability leaders.
We are currently at the forefront of a broader industry shift, with an increasing number of private and institutional investors incorporating impact into their investment strategies. The increasing pressures that public companies face to incorporate ESG factors in their operations have also trickled down to private markets. While robust Impact Management and Measurement (IMM) approaches and the prioritization of ESG issues are still relatively nascent in venture capital (VC) and growth equity, now is the watershed moment. This presents an opportunity for outsized influence by embedding impact and ESG concepts in the core of companies’ ethos from an early stage. Energize has welcomed these changes and is committed to meeting the moment.
I joined Energize as the Head of ESG & Impact in January to build on Energize’s momentum and develop strategies to establish leadership in this space. My first eight months in the role have focused on formalizing our impact management and ESG processes, joining and forming new collaborations among other investors and LPs, and building tools to support our portfolio. This report is the product of Energize’s internal investment in impact and ESG.
Our first Annual Impact & ESG Report is not perfect. Within Energize and private markets more broadly, there is a need for continued learning around metrics tracking and management, as well as an imperative for improved ESG outcomes. However, establishing a culture of transparency and openness for collaboration is critical to driving progress, and in sharing this report we invite our peers to join us in the conversation.
Our report showcases the incredible impact potential of Energize’s portfolio, with digitization as the backbone of sustainability. Our investment focus is on leveraging software to deploy and scale existing sustainable technologies (e.g., solar, wind, batteries), enabling immediate impact. Aligned with our thesis, we identified four key themes driving impact across our portfolio:
Within the report are key performance indicators that illustrate how our portfolio companies are contributing to impact outcomes across these themes. Overall, we estimate that our portfolio companies helped enable more than 7.3 million MTCO2e of avoided emissions in 2021.*
We believe businesses that prioritize ESG can deliver enhanced value, not only to investors, customers and suppliers, but also to employees and communities. Energize considers ESG in relation to how we internally manage our firm and our portfolio, aiming to actively support our portfolio companies in improving their ESG practices. We estimate that Energize’s own Scope 1, 2 and 3 (travel and employee commuting) emissions totalled 77 MTCO2e in 2021. We are working toward operational carbon neutrality by purchasing quality carbon credits in this amount through our portfolio company NCX (see the forests we supported and the impact of our participation via our dashboard). Energize is also working with partners such as Chicago:Blend to increase diversity in our hiring practices, and we aim to deliver market-leading communication and transparency to investors.
Continuing to build on and further develop our ESG strategy and reporting is a key priority for 2022.
In the coming year we look forward to growing our impact and elevating our ESG strategies, including continuing to improve the precision of our impact calculations and building ESG frameworks custom to climate tech software. We hope to provide more practical tools and resources to our portfolio companies and elevate ESG on the board agenda, working hand-in-hand with founders and management teams.
As we progress in this journey, we are excited to engage with new partners and collaborators to align on common approaches and share best practices. Energize is now a member of VentureESG and Responsible Innovation Labs (RIL), which aim to improve consideration of ESG and broader societal factors in the development of early-stage technology companies. We are also part of several informal groups that are emerging with likeminded investors, and we welcome the opportunity to work with others in this ecosystem to drive change. We are excited to share the first steps of our journey and raise the bar together.
Interested in connecting or collaborating on impact and ESG efforts? Let us know at Lauren@energize.vc.
Download our 2021 Annual Impact & ESG Report here.
*Our portfolio companies are not solely responsible for key impacts above, but act as a key enabler in the impact value chain. We have not pro-rated impact for Energize’s investment stake nor quantified additionality across the value chain. For detail on calculation methodology please see the appendix included in Energize’s 2021 Annual Impact & ESG Report.