Today at the Reuters ESG Investment Summit, SupplyShift announced that it has launched InvestShift, a new technology platform for private equity and investment management firms to measure and improve the ESG performance of their portfolio companies, including the supply chains of those companies.
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As consumers, regulators, employees, and limited partners continue the push for more sustainable business, reliable sustainability metrics have become a top priority for private equity firms and institutional investors. Good ESG creates a competitive differentiator, builds compelling ESG narratives for public exit, and helps attract new capital as Limited Partners require more stringent ESG standards. Sustainability and social responsibility are becoming a key purchasing theme for all industries, and investors need new mechanisms to efficiently manage and improve portfolio ESG performance, particularly as it relates to supply chains. Since most ESG impact exists in a company’s supply chain, such data are critical for a holistic ESG approach.
“There is a massive opportunity for firms to lean into ESG and stand out, especially through targeted efforts to improve sustainability in supply chains, where the majority of ESG impacts are found,” said Craig Vachon, Founder of Chowdahead Growth Fund, Senior Partner at NextStage Capital, and Advisor to SupplyShift. “The availability of this new platform is game changing. While ESG scores have been available for a portfolio company’s own operations, investors have been blind to the sustainability profile of the suppliers to those companies. InvestShift fills that gap.”
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Adoption of ESG strategies is still lagging in private equity, and common measurement approaches like ESG rating tools and sustainability report evaluation are unsophisticated and lack scalability. Furthermore, the majority of ESG impacts are located in global supply chains, and current tools fail to adequately address ESG risks in supply chains.
“InvestShift’s technology will allow us to take our manual ESG measurement approach to scale,” said Priya Parrish, Managing Partner of Impact Engine, a Chicago based venture capital and private equity firm. “As an impact investing firm, having data that accurately tells the ESG story of our investees is critical, and most available technology that would improve efficiency doesn’t provide the necessary level of depth. InvestShift will allow Impact Engine to perform thorough ESG screens for current and prospective investments, which helps us engage our portfolio and drive improvement much faster.”
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