ESG Training for Venture Capital funds held in West Africa

On July 18 and 19, twelve managers and co-founders, including eleven women, from seven pre-selected venture capital funds in Senegal and Côte d'Ivoire were invited to participate in the Leading in ESG training at the GIZ Teranga Hub in Dakar, Senegal. The VC cohort was trained by VentureESG, a global non-profit organization that works with venture capital funds and Limited Partners (LPs) on the meaningful integration of Environmental, Social, and Governance (ESG) principles. The two-day training was aimed at helping venture capital firms enhance their preparedness for ESG principles and better integrate them into their investment decisions and due diligence processes.

The training began with defining ESG principles and distinguishing them from "impact." Participants learned that, unlike impact, ESG principles are directly related to the commercial success of startups. ESG is not just about philanthropy but is a structured framework that can positively influence the performance and sustainability of businesses.

For example, ESG principles require startups to ensure data protection and respect labor rights. Adopting ESG practices can differentiate a company in the market, enhance its reputation, and attract more sustainable investments. Participants also explored how ESG principles should be adapted to the specific sectors of the ventures. For instance, a tech startup might focus on data security and digital inclusivity, while an agricultural company would need to address resource management and worker well-being. VentureESG’s approach helps contextualize these principles according to sector-specific needs, ensuring that ESG practices are relevant and applicable.

A key part of the training was dedicated to the tools developed by VentureESG to facilitate the integration of ESG principles into venture capital due diligence processes. VentureESG provides a range of structured resources and frameworks to help investors systematically and effectively assess the ESG performance of startups. These tools help investors understand how a structured integration of ESG principles can enhance the quality of their due diligence and add value to their investments.

The session concluded with a practical demonstration of how these tools can be applied, showing VC participants how to use them to strengthen ESG integration in future investments.

Additionally, the CATAL1.5°T initiative and VentureESG organized a complementary event with a panel discussion on the state of sustainability in venture capital financing in West Africa. Notable speakers from renowned venture capital firms and the West African platform CATAL1.5°T shared their perspectives: Hamada Touré (Co-founder and Managing Partner - Joliba Capital), Khadija Ba (Principal Investment Partner - P1 Ventures), Fatou Doumbia (Digital Ecosystem Advisor for West Africa - GIZ CATAL1.5°T), and Johannes Lenhard (Co-director and Moderator - VentureESG). Discussions focused on general funding gaps and explored solutions such as greater collaboration within the ecosystem or innovative funding mechanisms.

“The ESG training led by VentureESG was a valuable experience for the VCs involved, demonstrating how integrating ESG principles can not only address environmental and social concerns but also enhance the commercial success of businesses,” emphasized Fatou Doumbia from GIZ.

According to participants, the training was a resounding success, bringing together a cohort of like-minded venture capital funds. The collaboration continues, with each participant invited to join VentureESG’s new Emerging Markets community, dedicated to sharing ESG knowledge among venture capital funds in emerging markets, with free access to a Notion Knowledge Hub. This marks a significant step toward promoting an interconnected ecosystem of sustainable entrepreneurship and climate innovation in French-speaking West Africa.