Lightrock is a global impact investing platform that backs purpose-driven companies tackling the world’s biggest challenges. Lightrock funds invest in companies that pursue scalable and tech-driven business models around the key impact themes of people, planet, and productivity/tech for good. Its portfolio includes more than 90 high-growth companies across Europe, US, Latin America, India and Africa, supported by more than 115 Lightrock professionals based in six global offices. A certified B Corp, Lightrock is backed by LGT, the international private banking and asset management group, and other leading global institutions.
Caroline Truong is on the Impact and ESG team at Lightrock. She is passionate about supporting impact-driven entrepreneurs and believes in the importance of capital as a critical force to drive innovation and sustainable development. Novata sat down with Caroline to learn more about her role, Lightrock’s ESG journey, and how the firm is contributing to a more sustainable form of capitalism.
Our Conversation with Caroline Truong
What sparked your interest in ESG?
During my university studies in international affairs and business administration, sustainability and ESG-focused initiatives were beginning to gain more momentum and I was fascinated by the various means that organizations could curtail negative environmental impact and improve their sustainability practices. This initial interest led me to delve into the topic further and, ultimately, focus my thesis on sustainable entrepreneurship. Since then, ESG has come a long way, both as a topic and profession.
What is your role at Lightrock?
At Lightrock, I am part of the Impact and ESG team. We ensure that Lightrock’s Impact and ESG management systems adhere to the highest standards and align with best practices in our industry.
As a team, we cover a wide variety of roles that demonstrate how environmental, social, and governance (ESG) and impact considerations are integrated throughout our entire investment process. This includes everything from assisting with due diligence to fostering value creation within our portfolio companies. Moreover, an important part of our role involves reporting, tracking, and monitoring impact and ESG data, not only across our funds and companies but also within our own organization.
From your perspective, what is the value proposition for collecting ESG data? How does your team leverage this information?
The value proposition for collecting ESG data lies in understanding and managing risks and identifying opportunities for improvement. Lightrock is leveraging this information to track performance, as a basis to provide strategic guidance, and to support portfolio companies in achieving their impact goals. Data helps not only mitigate risks but also unlock opportunities for value creation and positive societal impact across our investment portfolio.
What challenges were you facing in the ESG data collection process that prompted the search for a software solution?
As our portfolio continued to grow, we recognised an opportunity to enhance our ESG and impact metrics collection. Initially, we utilized a spreadsheet-based approach for data collection. However, with our expanding portfolio, we realized the need for a more streamlined method. This recognition was not about inefficiency but rather about evolving our processes to match our growth and the increasing complexity of data management.
Our anticipation of the enhanced requirements set by the SFDR motivated us further to not just seek optimization, but to also empower our portfolio companies to effortlessly meet these new standards. It was critical for us that the data collection process was as accessible and straightforward for our portfolio companies as possible. Novata is supporting us on this journey, providing a user-friendly platform for the GP and portfolio companies to navigate data requests.
What advice would you give firms just starting their ESG journey?
It’s important to remember that integrating ESG practices is a progressive journey, not a one-time task. It involves steady advancement rather than immediate perfection. Our strategy focuses on understanding the specific needs of our companies and providing tailored support to help them grow at their own pace. We believe in meeting our companies where they are and guiding them through their evolution with patience and expertise.
This approach not only ensures compliance and efficiency but also fosters a culture of continuous improvement and sustainable growth. So, to firms just starting their ESG journey, embrace this process with openness to change and a commitment to gradual progress. With the right mindset and strategies, the journey can be incredibly rewarding.
