Leading for Success: Measuring ESG Benefits to Companies, Communities and Funds

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Measuring ESG Benefits to Companies, Communities and Funds
By Kevin Kelly, CEO and Founder, Altvia

We at Altvia believe running our business in a responsible, beneficial manner requires serving the needs of all our stakeholders – including clients, partners, employees, and the communities where we operate. While the impact investing movement has long recognized the effects that investment projects can have on society, the private equity industry as a whole is growing increasingly focused on concepts like Environmental Social Governance (ESG) and corporate responsibility. Following sustainable management trends that began in Europe, and the example of leaders like Patagonia founder Yvon Chouinard, American business enterprises are recognizing that “doing good” is good business, and that companies which aspire to be socially beneficial usually are.

Structuring investments under the guidance of ESG principles creates win-win situations for everybody – there’s an inherent risk management analysis in considering whether or not a deal is going to be a long-term good for a community and its environment. Increasingly, funds and institutional investors are including ESG characteristics in how they evaluate investments at both the company and fund levels – but here’s the question that still lingers: how do we characterize those guidelines, and how do we quantify being responsible?

The goal for ESG isn’t avoiding controversial sectors like firearms manufacturers or strip mining operations, but rather being able to demonstrate the beneficial impact that a fund’s investments are having on the larger community while being profitable for direct stakeholders. Measuring these results requires new metrics and analytics, which historically smaller companies are unaccustomed to recording, either due to a lack of resources, time, or knowledge. Even if a company has these figures, there’s no standard to serve as a comprehensive yardstick for success, and no format in place to report ESG stats in an efficient way. That’s something the industry is working on, and an issue in which technologies like ours can play a crucial reporting and communications role.

Like Patagonia, Altvia takes an active stance on corporate responsibility, and was recently recertified as a B Corp company, demonstrating our adherence to the non-profit group B Lab’s rigorous standards of social and environmental performance, accountability, and transparency. We were also named to B Corp’s 2015 list of Best Companies for Workers scoring in the top 10% of all Certified B Corporations on the B Impact Assessment for worker impact. Organizations like B Corp are leading the charge in setting guidelines for evaluating corporate responsibility and business impact. Similar standards are gradually being worked out for the private equity industry, and when we get there, funds and institutional investors will be well on their way to proving that businesses can be causes for good at the economic, social and environmental levels. European funds and asset managers have already made great progress in these fields, proving that the future of ESG is already here.

About Kevin:

Kevin Kelly founded Altvia in 2006 and brings a unique mix of technical acumen, business development skills, creativity, and energy to Altvia. Before starting Altvia, Kevin served in a CTO advisory role to a Chicago-based Buyout Fund of Funds with nearly $1B under management. He has also worked in various technical sales, business development, and management roles in small startups and leading technology firms such as Cisco Systems and NEC Unified Solutions. He is
actively involved in Colorado’s entrepreneurial communities.

In his free time, Kevin enjoys hiking, skiing and fishing the Rocky Mountains with his wife and 3 children and playing and coaching ice hockey.