AC Ventures partners with BCG to promote Indonesian ESG standards

Indonesia-based AC Ventures (ACV) has released its Scaling Impact With Technology report, setting up the first set of quantifiable ESG standards in the archipelago’s tech landscape.

The report, which was done in partnership with the Boston Consulting Group, applies an impact analysis to ACV and its portfolio companies.

Photo credit: AC Ventures

The net impact ratio metric juxtaposes the degree of positive and negative resources used by a firm, which is akin to a profitability metric for ESG.

ACV recorded a positive 37% impact ratio, which is a higher-than-average figure in contrast to Nasdaq Small Cap Index’s positive 29%.

There are currently no standardized measures for quantifying ESG in Southeast Asia, which is why ACV based the analysis on a standard created by Finland-based The Upright Project. The startup split the private economy into 250,000 types of goods and services and used machine learning to understand the impact of each product.

The new metric enables institutional investors to make better ESG decisions and optimize their net impact ratio.

“This means that capital will start to flow into companies that are solving important problems, rather than the companies that are causing them,” The Upright Project COO Toni Laitila said in a press roundtable.

ACV created the publication to inspire other companies and set a baseline for how ESG should be reported.

See also: Indonesia’s ‘Uber for waste’ finds profits in garbage collection

“This will be as important as financial metrics in evaluating the performance of new companies and our portfolio companies,” Adrian Li, founder and managing partner at ACV, said in a statement. 

ESG assets are poised to grow to US$41 trillion this year and jump to US$50 trillion by 2025, Bloomberg Intelligence reported.