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The first in a four-part series on how the application of the ESG framework to vet early-stage investment opportunities ensures impact objectives are met
Mazarine's investment process includes evaluating the social and environmental impact of a prospective portfolio company. And while we are all familiar with the concept of Environmental, Social, and Governance (“ESG”) investing, it has traditionally been viewed as a tool for institutional investors to evaluate larger publicly traded companies. However, our Point of View is that with some adjustments the ESG framework can also be valuable when evaluating pre-seed, seed, and growth-stage technology companies with innovations that generate E, S, and G impact by improving efficiencies and addressing risks relating to water and wastewater[1]
The ESG framework propels the Mazarine thesis
The most promising investment opportunities in ‘water’ over the coming 3 to 5 years are innovations that improve efficiencies and mitigate risks. Water-risk is a clear and present danger in any number of sectors spanning agriculture, the built environment, heavy and light industry, utilities, power generation, and financial services. While the word "risk" may sound more negative than words like "sustainability" or "resiliency", the simple fact is that water-related risks impact individuals as well as the public and private sector in developed and developing countries alike. It has also become clear that any investment in innovations that mitigate water-risk also inherently is, to some degree, an impact investment. Yet, the challenge has been how to best categorize and quantify the impact component; hence Mazarine’s decision to start leveraging the ESG framework to inform the development of our portfolio.
Download the rest of this Point of View below.
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