SUSTAINABILITY

THE APPROACH

BGF adheres to a solid corporate governance structure due to the collaboration between PMV, BNP Paribas Fortis and the diverse board of directors. In addition, BGF tries to actively promote and insure solid governance through representation in the governance bodies of its investee funds.
However, BGF also aims to play a leading role in the ESG debate by requiring its investee funds to:


1. adopt suitable ESG guidelines, including by its portfolio companies

2. adhere to a restricted investment list, and

3. provide a yearly ESG report

SUSTAINABILITY

A ROBUST FRAMEWORK


A commitment from the investee fund is requested to honour a list of restricted investments to align both parties. This way BGF can ensure that a set of principles regarding responsible investments are taken into account by the fund managers. The extensive list is based on guidance provided by EIF, Invest Europe and the limited partners of BGF and includes amongst others the adult industries, unsustainable production of food sources and activities related to tobacco.


In order to facilitate and consolidate the information received from our investee funds, BGF has developed a robust framework together with its advisors at PMV and Forum Ethibel. This framework maps the ESG efforts of investee funds and their underlying portfolio companies through a standardized template. This questionnaire contains 16 KPI’s, spread over four dimensions, being people, planet, (societal) profit and governance.

The framework allows BGF to evaluate, in an objectified and non-quantitative approach, a standardized sustainability impact metric for each investee fund. This outcome also allows for a mapping towards the 17 Sustainable Development Goals (“SDG’s”) as set forth by the United Nations (refer to the picture for a full overview on all SDG’s). The focus of BGF’s management lays on five SDG’s, being:


SDG 3: Good health and well-being

SDG 8: Decent work and economic growth

SDG 9: Industry, innovation and infrastructure

SDG 12: Responsible consumption and production

SDG 17: Partnerships for the goals


The table below highlights several KPI’s that contribute the most to BGF’s key SDG’s.

Key performance indicators

SDG 3
Good health and well-being

1.1 – Surplus value for the region

1.2 – Quality of life

1.3 – Unmet (medical/social) needs

3.1 – Access to finance

3.2 – Employment (quantitative)

3.3 – Employment (qualitative)

SDG 8
Decent work and economic growth

1.1 – Surplus value for the region

3.1 – Access to finance

3.2 – Employment (quantitative)

3.3 – Employment (qualitative)

3.4 – Innovation

SDG 9
Industry, innovation and infrastructure

1.4 – Access to or improvement of (digital) infrastructure, mobility and utilities

2.4 – Clean technology

3.4 – Innovation

SDG 12
Responsible consumption and production

2.1 – Sustainability of environment and promotion of biodiversity

2.2 – Sustainable production

2.3 – Sustainable consumption

3.4 – Innovation

SDG 17
Partnerships for the goals

4.1 – Business integrity

4.2 – Collaboration with third parties

4.3 – Board structure

4.4 – Transparency

In conclusion

In conclusion: this approach allows the BGF team to provide its limited partners with a solid annual ESG report covering ESG aspects.

The past and the future

The results
The first ESG report was published over the year 2020 and contained several key take-aways.

The current BGF portfolio with five investee funds shows a balanced contribution towards the dimension People and (Societal) Profit. Governance shows a better than median contribution as this is an important aspect within venture capital and private equity.
One dimension, being Planet, is lagging and shows room for improvement.
Next steps
With the new Sustainable Finance Disclosure Regulation (“SFDR”) coming in place, BGF is working on the next steps in order to improve its role within the ESG debate.

Currently a pre-screening ESG evaluation tool is being developed in order to gain a more complete and standardized view on potential fund investments.

BGF is also looking into external validation of its ESG policies by becoming a UN PRI signatory and obtaining an external rating.
Top