The relationship between ESG criteria and the amount of fundings raised by the start-ups.

Abstract

Recently the demand for non-financial information incresed considerably. The development of responsible investment strategies, as well as the introduction of the principles for responsible investment (PRI) encouraged companies to consider also nonfinancial aspects in their strategies. While the emergence of ESG crieria represents the backbone of this new sustainability world. Companies’ disclosure of ESG information became fundamental and incresed a lot, due to the incresing regulation on sustainability and the introduction of some guidelines such as the SDGs. In the first chapter there is an overview of the ESG concept, as well as the ESG regulations and will be explained in detail each ESG factors. In the second chapter the attention will be given to the role of the ESG rating agency in assessing the companies’ ESG performance. In the first part of the third chapter will be shown the different sustainable investment strategies that could be used to integrate ESG criteria in the investment decisions, while the second part will be devoted to the way in which VCs and BAs consider ESG criteria in their investment process. The final chapter will focus on the reaserch part in which will be analysed the ESG information of 150 U.S. based start-ups belonging to different industries, in order to demonstrate if there is a positive relationship between the ESG performance and the amount of fundings raised by the start-ups.