The Business Development Bank of Canada (BDC) announced today the launch of a new ESG reporting template, aimed at enabling Canadian VC and mid-market private equity funds to track and report on key ESG metrics in their own firms and across their portfolios.
BDC provides financing, advisory services and capital to small and medium-sized enterprises in Canada. The company said that it developed the framework following consultations with industry partners and stakeholders on the need to bring more transparency and embed ESG disclosure and reporting standards within the Canadian venture capital space.
BDC said that it will expect all of its portfolio general partners and their underlying portfolio companies to report ESG metrics on an annual basis. Given its extensive presence in the Canadian VC market – BDC is a limited partner in private independent VC funds representing 62% of the capital being invested in Canada – this initiative will cover the majority of the market.
Sandra Odendahl, Senior Vice President and Head, Sustainability and Diversity, BDC, said:
“We know Canadian firms want to be agents for good and value the competitive business advantages it offers, but they don’t always have the knowledge, tools, or capital to make it happen. Our role as a development bank is to give them those tools, with a goal of creating more sustainable businesses and a stronger, greener, and more inclusive Canadian economy in the process.”
The new template aims to enable venture investors to better understand the non-financial risks in their investment portfolios, such as supply chain, data privacy and environmental issues, report on a baseline of sector agnostic ESG metrics, document emissions, energy consumption and climate policies of portfolio companies, and track progress on ESG policies and practices over time.
The launch of the new template follows the release last year by BDC of a diversity, equity and inclusion (DEI)-themed reporting template, aimed at enabling GPs to track and report diversity and inclusion metrics related to gender, race, ethnicity, and identification. BDC said that it will merge the two templates in 2024.
Alison Nankivell, Senior Vice President, Fund Investments and Global Scaling, BDC Capital, said:
“BDC Capital is more than an investor, we support portfolio companies and funds all along their growth journey and are playing a catalyst role within the entire ecosystem. ESG monitoring and reporting has become a priority for a significant number of Canadian investors who understand that every organization must do its part to grow a more sustainable economy.”