#LCAW2022: Albion hold firm stance on ESG despite varying opinions in the financial sector

by | Jun 27, 2022

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Celebrating London Climate Action Week, this article features as part of IFA Magazine’s editorial campaign throughout this week, which aims to highlight key issues, news and views in the field of climate action.

ESG has been making headlines recently but with an unfortunate negative sentiment as financial institutions are being probed for alleged greenwashing.

The much-covered suspension of HSBC’s Stuart Kirk served to remind us that opinions are still divided on the importance of ESG. Not at Albion.

As a business, we are very clear that ESG matters and practice this across all facets of the E, S and G. Our focus is both external, offering support to the portfolio companies that we interface with, and internal, because it’s critical to practice what we preach.

On the external front, environmental, social and governance considerations are incorporated across the lifecycle of our investment process. This ensures an appropriate risk-return profile for our investments for the benefit of our investors and helps portfolio companies to develop sustainable long-term strategies.

A key tool is the annual review of all our companies against an ESG balance score card to highlight areas that require improvement and offer resources to companies that need assistance to help improve weaker areas. It also allows Albion to track to ensure that companies are not falling below our ESG standards.

As a signatory of the UN Principles for Responsible Investment, we aim to be a net zero venture capital firm. Since January 2021 we’ve partner with PlanA, a carbon accounting software platform, to guide us in data collection and emission reduction. Our second annual measuring exercise is currently underway to identify emission hot spots within our business and create initiatives to reduce emissions to all but unavoidable levels.

To us, carbon removal is crucial if the world wants to prevent irreversible climate change and are mindful that traditional carbon offsetting projects can be difficult to quantity and potentially greenwashing. True to our entrepreneurial DNA, Albion have invested in carbon removal Biochar offsets, which is an emerging technological innovation.

As biochar can hold its captured carbon dioxide for thousands of years, we see this as a key investment in reaching net zero. For the period of 2020/2021 Albion purchased carbon removal offsets to actively remove our share of emissions from the atmosphere.

On the social front, Albion recognises the importance of having a diverse and inclusive culture. It is something that we constantly strive to improve on. Across our VCT portfolio companies around 30% are led by female founders and CEOs; this compares with Europe where around 2% of venture capital goes to all-female teams and 5% to mixed teams.

As a proud signatory to the Investing in Women Code, we commit to adopting internal practices that aim to improve female entrepreneurs’ access to the tools, resources and finance they need to grow their business. From a business standpoint, around 50% of Albion’s workforce are female.

Albion’s initiatives demonstrate our passion for achieving a strong and positive ESG policy and influential impact on all investments. We still have a way to go but are moving in the right direction and strive to lead by example.

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