The twenty-first century has confronted the global community with challenges that require global cooperation at all levels.

Given the substantial role that both private enterprise and capital play in our interconnected world, we at Balderton recognise the critical need for us to contribute to addressing these challenges.

Earlier this year, we began an effort to ask ourselves how we would formalize ESG at Balderton. While we’ve been consistently committed to strong governance, and strive to continuously understand how we impact society and the environment in which we live, questions remain:

• How should we define a formal ESG policy in the context of a European venture capital firm?
• What might an effective policy mean in the context of our relationships with our founders and portfolio companies, many of whom represent nascent companies, short on both time and resource?

We have a responsibility to proactively engage and build a more sustainable and inclusive ecosystem

While some have used ESG as an effort to understand and minimise exogenous risks, we know it is insufficient to simply avoid behaviour with negative ESG consequences. Rather, we have a responsibility to proactively engage in behaviours informed by clear values and to measure the effect of those new behaviours rigorously. We have to work hard to embed these values into who we are as individuals, who we are as a firm, and to promote them to our portfolio.

Developing a framework

After careful consideration of the many external frameworks available, we have developed a set of values, our Sustainable Future Goals (SFGs), which were informed by and structured around the UN’s 17 Sustainable Development Goals (SDGs).

UN’s 17 Sustainable Development Goals

We chose the SDGs as our base partly because they are already widely adopted by governments and organisations, but more specifically because they represent a positive framework that we as a firm stand behind. As European investors, we are also proud of and take inspiration from the work the EU is doing with regards to the European Green Deal, and look forward to aligning our future efforts further with them.

We are committed to continually improving our SFGs, and sharing everything we learn with the wider community.

We are excited to share our Sustainable Future Goals with you. We endeavour to hold ourselves accountable to these values, and to improve and refine them as we go.We also commit to sharing what we learn, not only with our portfolio, but with the wider venture community, in the hope that we might all help each other to do better.

Balderton’s Sustainable Future Goals (SFGs)

ENVIRONMENTAL

SFG 1. Urgent climate action (UN SDG #13, 15)

Substantially reduce emissions and offset existing emissions.

SFG 2. Responsible consumption (UN SDG #2, 12, 14)

Best standards for responsible consumption and production. Sustainable manufacturing, distribution and retail. Reduce food waste to minimal levels.

SFG 3. Green cities (UN SDG #11)

Help make cities more breathable, liveable and sustainable.

SFG 4. Renewable energy (UN SDG #7)

Accelerate the shift to affordable and clean energy.

SOCIAL

SFG 5. Fairness and equal opportunities (UN SDG #1, 8, 10)

Jobs and or services that improve the lives of vulnerable groups. Workplaces that enable employees to have equal opportunities and to reach their full potential as we and the companies in our portfolio grow and thrive

SFG 6. Gender equality, diversity and inclusion (UN SDG #5)

Diversity in all its forms, and an inclusive working environment with a zero-tolerance approach to discrimination of any kind.

SFG 7. Good health and well being (UN SDG #3)

Ensure good health and wellbeing in the workplace.

SFG 8. Lifelong learning (UN SDG #4)

Vocational training and lifelong learning for employees. Quality education for children.

GOVERNANCE

SFG 9. Highest ethical and governance standards (UN SDG #16)

Transparency and strong ethics in governance. Stand firm against corruption and unethical behaviour, and compliance with all relevant regulatory bodies.

SFG 10. Data rights are human rights (UN SDG #16)

Treat personal data and the privacy of customers and users with respect.

Implementing Balderton’s SFGs

Our SFGs articulate measurable goals that we as a firm will work towards. We believe that there are three main axes through which we can implement these SFGs:

1. Balderton Internal Operations.
   We exercise the greatest degree of control over our own behaviour, and we will hold ourselves to the strictest standards of measurement and transparency when delivering the SFGs.
2. Balderton Portfolio Companies.
   While we recognise our position as a minority shareholder, we endeavour to communicate and leverage the SFGs as a guide for the companies in our portfolio. We also seek to listen to, learn from, and share diverse approaches furthering the goals across our portfolio.
3. Balderton Investment Decision Making.
   The SFGs will be considerations for us during our investment process. While we will not measure our own investment performance through these goals, we have conviction that the best entrepreneurs and young companies of today are similarly motivated to further these sustainable future goals either in their operations or through the products and services they develop. We interpret alignment with our goals as positive signals for future value creation.

We will be implementing our SFGs using an OKR structure. Each of the 10 SFGs has a set of objectives across the three axes above, and each objective has corresponding key results, which we will be measuring through our annual SFG audit.In our full policy, we have 60 objectives and 77 key results tied to those objectives, spread across our ten goals and three axes.As an example, here is a selection of our Objectives and Key Results from SFG #6: Gender Equality, Diversity & Inclusion.

Example: 

Timeline and Progress

We have already presented our SFGs to our Portfolio, and are excited to already be working with several of them on their own ESG journeys. Our SFGs were also the top item that we discussed with our own investors in our Annual General Meeting this year.

In parallel with the work we have done this year in defining our objectives, we have begun to make progress on several fronts. We know there is a long way to go but would like to take a moment to share with you some of the steps we have taken this year

SFG #1 – Urgent Climate Action

• We achieved a 41% reduction in CO2 emissions from flights and hotels in the first half of 2020. While much of that was COVID-19 related in Q2 2020, we have implemented remote-friendly policies (see below for example) to allow that momentum to persist.

• We’ve also invested in several companies this year where a reduction in CO2 emissions are core to their vision, like Tibber and VanMoof, among others.

SFG #3 – Green Cities

• We rolled out bicycle commuter benefit plans to all our UK staff

SFG #6 – Gender Equality, Diversity & Inclusion

• We have rolled out 26-week gender-blind parental leave policy for Balderton employees
• Long overdue, we hired Balderton’s first female Partner, Rana Yared earlier this year
• We achieved Level 1 Certification of The Diversity VC Standard. You can read more from our Partner Suranga on this here. 
• 5 of the 14 new companies we have partnered with this year are led by women, a meaningfully higher proportion than the ratio in our deal flow pipeline
• We have implemented Balderton Office Hours to spend more time and with underrepresented founders and make them a larger proportion of our pipeline

SFG # 7 – Good Health & Well-being

• We have launched Balderton CEO forums as a way for our Founders to find peers to listen and empathize with each other

SFG #9 – Highest Ethical & Governance Standards

• We became signatories to the UN PRI, and Leaders for Climate Action
• Together with this announcement, we are launching our Balderton Portfolio SFG Community, and earlier in the year led a B-Corp Certification Workshop for our portfolio founders

We look forward to reporting back further on our progress with our first Annual SFG Audit in 2021.

Our SFGs are intrinsic to who we are and who we would like to be as a firm.

Our 10 Sustainable Future Goals at Balderton are intrinsic to who we are and who we would like to be as a firm. We welcome and invite your feedback on these goals and charge you with helping to hold ourselves accountable to them.

Please reach out to us with any questions or if you’d like to work together on achieving these goals.