Last week’s editorial referenced the increased number of corporate venturing units setting up additional funds for specific purposes as well as new units continuing to emerge, from corporates such as UK-listed media group ITV, which has set up Studio 55 Ventures in collaboration with Founders Intelligence to invest £10,000 in each of eight business ideas aimed at 16-34 year olds.
Japan-listed electronics and media group Sony has also joined in with its latest corporate venture capital fund, Sony Innovation Fund: Environment.
Sony established the Sony Innovation Fund in July 2016 to invest in seed to early-stage startups and, in March 2019, Sony established a joint venture (JV) company called Innovation Growth Ventures with Daiwa Capital to form a larger joint fund, Innovation Growth Fund I, to target the growth-stage deals.
The third fund will “nurture ventures specialising in new environmental technology” as Sony targets a “zero environmental footprint” by 2050 throughout the lifecycle of its products and business activities.
Toshimoto Mitomo, executive vice-president of Sony, said: “With its corporate venture capital activities, Sony has promoted open innovation by nurturing technologies and startups for the next generation. Through the activities of this new environment-focused fund, Sony aims to accelerate innovation that will help solve global environmental issues and contribute to the progress and development of society.”
Gen Tsuchikawa, CEO of Sony Innovation Fund (SIF), added: “We created this as a JV between our CSR (corporate social responsibility) groups and SIF.
“The discussion boiled down to is this a grant or is this an investment and, since it is an investment, we will run all investment decisions at SIF after initial screening at CSR groups.”
The fund will start by investing ¥1bn ($9.2m) primarily in seed to early-stage startups but a further expansion in scale was being considered in the future depending on the level of activity, according to the company. It said all of Sony Innovation Fund’s vehicles are planning to add environmental, social and governance (ESG) to their investment evaluation criteria.
As GCV also wrote last week, there are few easy answers to global challenges, such as plastic waste, but including ESG across all investments is a good start rather than a siloed approach with limited resources and funding.
A tipping point has indeed been reached this year as individual corporate and investment decisions start pointing in the same direction of looking at the impact achieved through investments as well as the financial risk and return.
Ronald Cohen, in a keynote at the Global Steering Group (GSG) conference, said about half of professionally-managed assets – between $30 trillion and $40 trillion – were now managed with ESG and impact goals, in the past year about 50 banks were now taking ESG criteria into account in their lending decisions, and the US-led Business Roundtable of 180 corporations were putting forward stakeholder rather than shareholder focus in their decision-making.
You can hear Sir Ronald at the GCV Digital Forum on 29 September along with George Serafeim, the Harvard Business School professor tasked by the GSG to work out a set of impact-weighted accounting standards. Bottom-up decisions by consumers or corporations allied to shareholder and accounting measures are probably sufficient to take society towards an impact-led economy, but governments are also throwing their weight behind so-called green deal economies.
The European Commission is preparing its seven-year budget from next year with mission-oriented focus areas, such as oceans, climate, food and cancer, and this $100bn-plus of innovation funding will try and crowd in private investment through corporate venturing.
I will be talking at its conference on the 24th after the GCV Connect powered by Proseeder pitch sessions on sustainability and deep tech entrepreneurs on 22-23 September.
Together, we can make the world a better place and roll back the conditions political scientists have said have caused “The Turbulent Twenties”.
