ESG considerations in Venture Capital and Business Angel investment decisions

This working paper provides testimony on the integration of ESG considerations and impact investing in the areas of venture capital (VC) and business angel (BA) investing. The results are survey-based and are derived from the respective questions in the EIF VC Survey 2019 and the EIF Business Angels (BA) Survey 2019.

The paper discusses the combined findings from both surveys in relation to the respondents’ ESG considerations, and clusters the ESG-related results around six main themes:

• What is the level of ESG engagement in VC and BA investing?

• What motivates VCs’ and BAs’ ESG engagement (and what deters them from doing so)?

• What are the most common ESG investment strategies?

• How do VC firms implement ESG criteria in terms of policies and procedures?

• How do VCs and BAs perceive the relation between ESG considerations and investment returns?

• What lies ahead for ESG investing?

The full note can be found here – https://www.eif.org/news_centre/publications/EIF_Working_Paper_2020_63.htm

We’re also pleased to announce that Julien Brault and Simone Signore, from EIF’s Research and Market Analysis, authored a policy note entitled “Credit Guarantees in the COVID-19 crisis – Relevance and Economic Impact” published on the website of SUERF, the European Money and Finance Forum.

Abstract : We build a dataset of fiscal responses to the Covid-19 crisis for a broad range of countries. Credit guarantees contribute significantly to the policy mix, but a key question is whether these will produce the intended economic effects.

Our research on the impact of EU guarantees between 2002 and 2016 supports the view that this policy instrument promotes the growth of Small and Medium-sized Enterprises (SMEs) and reduces bankruptcy rates.

We compare the effects of credit guarantee policies within and outside of Europe and find similar positive impacts. However, we also identify dimensions where the instrument failed to bring significant economic impact. Finally, we discuss the use of credit guarantees in mitigating the effects of the crisis and limiting divergence in Europe.

Dr. Helmut Kraemer-Eis, European Investment Fund, EIF, L-2968 Luxembourg, logo EIB