AC Ventures hosts ESG and gender lens investing summit with private sector powerhouses

Published on September 5, 2023

Indonesia’s leading early-stage venture capital firm AC Ventures (ACV) recently convened a summit of private sector investment titans and rising Indonesian startups to set an agenda for propelling ESG and gender lens investing in ASEAN. A sideline event of the ASEAN Business & Investment Summit (ABIS), the gathering was held at ACV’s headquarters in downtown Jakarta, and included a variety of insightful keynote presentations and panel discussions.  

The summit was titled “Profit & Purpose: A New Era of ESG and Gender Lens Investing,” and featured an exclusive roster of speakers and attendees from major investors like the International Finance Corporation (IFC), Sarona Asset Management, and MAVCAP, as well as private sector powerhouses like Boston Consulting Group (BCG) and rising impact startups like electric vehicle motorbike company MAKA Motors, quick commerce pioneer Astro, and integrated fisheries supply chain platform Aruna. The event was divided into two distinct tracks for investors: ESG-focused and gender-equal investing strategies.

Increasingly, venture capital firms are seeing a mandate from limited partners and industry stakeholders to make sure their portfolios are ready for a new imminent era of ESG) best practices in Southeast Asia. 

Until recently in places like Indonesia, ESG compliance was always more of an afterthought for investors, rather than a focal point. But now, with more institutional capital from overseas trying to get into the market, local venture firms and startups alike are seeing a true need to quantify and report on their impacts on the environment and society at large – or risk being unable to raise subsequent funding rounds or enjoy meaningful valuation upside.

Further, large multinational companies must adhere to stringent ESG regulations in their home countries, and the capital they deploy overseas is not exempt from this.

To stay ahead of the curve, ACV uses The Upright Project, a technology company based in Helsinki, Finland that measures ESG and impact according to Northern European standards. The platform covers SFDR PAI indicators, EU taxonomy metrics, and UN SDG metrics for 14,000+ companies. The Upright Project enables smarter decision-making for institutional investors, consumers, and employees, and has 200+ organizations in 15 countries as clients.

The metric that guides the firm’s hand is called ‘net impact ratio.’ This percentage score quantifies how effectively a group of companies turns resources into positive impact. ACV and its portfolio recently ran baseline assessments across the four key dimensions of ‘environment,’ ‘health,’ ‘society,’ and ‘knowledge.’ 

The firm’s overall net impact ratio delivered an above-average +37% with its strongest areas being ‘society’ and ‘health.’ To provide helpful context, the Nasdaq Small Cap Index (NQUSS) recently featured an average net impact ratio of +29%. 

ACV’s Principal of ESG Lauren Blasco explained, “When tech startups focus on building strong ESG measurement and reporting mechanisms, they not only make their operations more efficient but also save money, discover new streams of revenue, and ensure they’re on the best footing possible to future-proof their businesses. As a venture capital firm, we support our portfolio in this area to reduce risks and unlock new avenues for value. This proactive approach also prepares them for the upcoming ESG regulations expected in the ASEAN region within the next few years.”

As a forward-thinking investment company, ACV is also a pioneer of diversity and inclusion in Indonesia’s investment sector. Within the firm, 50% of its senior leadership roles are occupied by women. Across its portfolio, this figure comes in at 41%.

While female inclusion is an important ingredient in any ESG-focused organization today, it is also a monumental investment opportunity, just waiting to be tapped in Indonesia. Helen explained that the nation, home to more than 64 million MSMEs—accounting for 98% of all businesses in the nation—is a fertile ground for venture capital investment. These MSMEs significantly contribute over 61% to the local economy. Remarkably, more than half of these enterprises are women-owned, which AC Ventures pegs as an annual investment opportunity worth over US$421 billion.

ACV’s Managing Partner Helen Wong said, “Investing in women-led businesses and backing female investors isn’t just a social responsibility; it’s a financial masterstroke. These enterprises are crucibles of innovation, showing superior financial returns, and resonating powerfully with today’s consumer values. They unlock untapped markets and stand as pillars of sustainable, responsible governance. At ACV, we don’t see backing women-led businesses as a niche strategy; we see it as a cornerstone of intelligent investing for the future.”

Learn more about ACV’s impact here: https://acv.vc/about/our-impact/