Earlier today, Indonesia-focused, early-stage venture capital firm AC Ventures (ACV) announced that it published the country’s most in-depth, data-driven impact report to date on the local digital economy.
In the report titled “Scaling Impact With Technology,” ACV analyzed its own operations, as well as those of its portfolio companies, to offer a numerical baseline for environmental, social, and governance (ESG) reporting in the nation’s tech scene and digital economy.
In partnership with Boston Consulting Group (BCG) and with support from The Upright Project in Europe (Upright), ACV carried out a rigorous analysis to better understand the tangible effects it is having on the environment and society in the archipelago.
Upright is a tech company based in Helsinki, Finland. Its mission is to create incentives for companies to optimise their net impact. It produces data that helps institutional investors and companies make smarter decisions for the future, with ESG reporting in mind.
Using Upright’s tech, ACV is the first venture capital firm in Southeast Asia to report on impact using quantifiable measures that meet European standards.
At the heart of the study is a metric known by industry practitioners as the ‘net impact ratio.’ This is a percentage score used to quantify how effectively a group of companies turns resources into positive impact. In the report, it measures how ACV and its portfolio performed in terms of ‘environment,’ ‘health,’ ‘society,’ and ‘knowledge.’
ACV’s overall net impact ratio delivered an above-average +37% with its strongest areas being ‘society’ and ‘health.’ To provide useful context, the Nasdaq Small Cap Index (NQUSS) features an average net impact ratio of +29 per cent.
As a forward-thinking investment company, ACV is committed to diversity and inclusion. Within the firm, 50 per cent of its senior leadership roles are occupied by women.
Across the portfolio, this figure comes in at approximately 40 per cent. In the report, ACV also unpacks the net impact of multiple portfolio companies and shares insights about their sectors and why they scored the way they did.
“The purpose of this debut report is to give ACV, our portfolio companies, and the tech ecosystem in general a baseline for what to report and how to report in terms of ESG and impact,” explained Lauren Blasco, Principle and Head of ESG at ACV. “There is no more important time to do this than right now, as companies are increasingly being held to higher standards around the world. Running these net impact assessments today actually puts the startups we invest in on the best footing possible for the future when this kind of reporting inevitably becomes more of a mandate.”
“The key to creating long-term sustainable companies is through empowering founders to build companies which generate value not only for the economy but for society and the environment. By using net impact ratios, we are now able to measure value creation explicitly for society and the environment. This will be as important as financial metrics in evaluating the performance of new companies and our portfolio companies,” said Adrian Li, Founder and Managing Partner of AC Ventures.
At its core, ESG is a framework for addressing long-term risks that organisations may face in years to come. In the realm of finance and investment, it’s a fast-growing vertical, and global ESG assets are likely to exceed US$41 trillion in 2022 and US$50 trillion by 2025, notes Bloomberg Intelligence.
“Our commitment to finding and catalyzing effective solutions to pressing societal issues is at the heart of our company’s purpose. And we know we can make the greatest impact through collaboration. Through this report with AC Ventures, and with the support from The Upright Project, we hope to leverage our contribution in supporting Indonesia’s businesses on the road to achieving environmental, sustainability, and governance compliance,” said Neels Steyn, Venture Architect Director for BCG Digital Ventures.
He added, “As a market with one of the fastest growing economies in Southeast Asia, societal issues are no longer the issues of tomorrow for Indonesia, but a current challenge that needs to be addressed. The report showcases how we will be able to see more contribution towards the nation’s sustainable and inclusive economic growth by supporting equal digital access and development in Indonesia.”
To read the report in full, please visit https://acv.vc/impact-report-2022/.
About AC Ventures (ACV)
ACV is a leading Southeast Asian venture capital firm investing in early-stage startups focused on Indonesia and ASEAN. The firm’s mission is to partner with and empower entrepreneurs with more than capital. ACV combines operational experience, industry knowledge, deep local networks, and resources to create value for startups. Its vision is to be a generational partner to founders driving positive societal change and economic impact in Indonesia and beyond.
ACV currently has over US$500 million in assets under management, invested across five funds. Since 2012, the firm’s partners have invested in more than 120 technology companies in the region, including some of the most iconic names in the ASEAN digital ecosystem. ACV’s Partners Adrian Li, Michael Soerijadji, Helen Wong, and Pandu Sjahrir lead a team of over 35 professionals with offices in Jakarta and Singapore.
About Upright Project (Upright)
Upright is a technology company based in Helsinki, Finland. Its mission is to create incentives for companies to optimise their net impact. Upright produces data on the comprehensive net impact of companies, with the aim of looking both at the negative as well as the positive impacts at the same time and enabling smarter decision-making for institutional investors, consumers, and employees.
In addition, Upright’s data offering covers the SFDR PAI indicators, EU taxonomy metrics, and UN SDG metrics for unlisted and listed companies. The Upright platform’s data universe is 14,000+ companies, and the clients include 200+ organisations in 15 countries (e.g. EQT, Trill Impact, Lightrock, LGT Capital Partners, Summa Equity, Nordea, etc).
About Boston Consulting Group (BCG)
Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today, we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholders—empowering organisations to grow, build sustainable competitive advantage, and drive positive societal impact.
Our diverse, global teams bring deep industry and functional expertise and a range of perspectives that question the status quo and spark change. BCG delivers solutions through leading-edge management consulting, technology and design, and corporate and digital ventures. We work in a uniquely collaborative model across the firm and throughout all levels of the client organisation, fueled by the goal of helping our clients thrive and enabling them to make the world a better place.