ESG in Venture Capital - Cultivating Tomorrow’s Value Systems

ESG: Three Simple Letters, Many Diverse Perspectives

In global finance, ESG has become one of the defining conversations on compliance and disclosures. In venture capital, it’s more about principles and guidance — shaping how young companies build and grow through the choices they make.

At Vertex, we see ESG as an approach to embed good governance, sustainable practices, and social responsibility into the DNA of tomorrow’s champions. Done right, it can also be a multiplier of long-term enterprise value.

ESG in VC: More Than Box-Ticking

For most asset classes, ESG often means disclosures, compliance, and the occasional long report that few people ever read. In venture capital, we engage with founders at the formative stage — when strategy, culture, governance, and business models are still pliant.

This means we have an opportunity to influence not just how a startup grows, but what kind of company it becomes.

What Investors Want

When we speak with our limited partners (LPs) and the broader investor community, three ESG priorities consistently surface:

Transparency and comparability of data: Moving beyond marketing slogans to information that supports decision-making. Investors need data they can trust.
Robust governance: Ensuring startups have the structures, systems, and supervision to scale responsibly — from financial discipline to responsible technology use.
Long-term resilience: Viewing sustainability not just as climate risk, but as the ability to anticipate disruption, adapt, and endure across business cycles.

LPs know early-stage companies cannot address every ESG issue at once. What they look for is a credible pathway forward and leadership with the mindset to build durable businesses.

Startups: Where to Begin

Founders often worry ESG will slow them down. In reality, it can be as simple as:

Identify what matters: Focus on the ESG factors most material to your business model and industry.
Lay strong foundations: Prioritise key issues such as data privacy, fair employment, transparency, and governance.
Signal intent: Lightweight policies or annual updates can demonstrate commitment to stakeholders.

None of this breaks the bank — but it sets the tone. These actions differentiate startups in the eyes of employees, customers, and investors. More importantly, they build trust, the rocket fuel for growth.

From Compliance to Competitive Advantage

The debate over ESG often asks: does it create real value, or is it just compliance? In venture-backed companies, the biggest impact is where ESG directly supports growth:

It wins customers, as corporates increasingly demand ESG standards in procurement.
It attracts talent, particularly younger workers who want alignment between job and values.
It unlocks capital, as later-stage investors raise the bar on ESG due diligence.

When embedded strategically, ESG strengthens reputation, resilience, and investor confidence.

Looking Ahead: Vertex’s ESG Journey

Our forthcoming Sustainability Report represents an important signal of intent. We are working towards aligning to global standards such as IFRS S1 and S2, but our goal is to move beyond reporting and towards measurable impact.

Over the next few years, we see our role evolving in three ways:

Equipping portfolio companies with tools to measure and improve ESG performance.
Sharing best practices across our global network to accelerate collective learning.
Identifying opportunities where sustainability is not just compliance, but a driver of competitive edge and long-term growth.

Ultimately, our ESG journey is about helping tomorrow’s champions scale responsibly, creating enduring value for shareholders and society alike.

Closing Thought

At its best, ESG gives founders and investors a shared language for building companies that last. It is less a set of obligations than a way of making better decisions early — ones that compound into resilience, trust, and growth.