PROPOSED SOLUTIONS FOR THE IMPLEMENTATION OF NEW ASSESSMENT TOOL BASED ON ESG AND SDG METHODOLOGY FOR IMPACT INVESTMENT SCREENING OF EARLY-STAGE START-UP (CASE STUDY: MDI VENTURES)

• Main Author: Dwi Julianto, Axel
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/70526
• Institution: Institut Teknologi Bandung

Over the next five years, Indonesia is expected to absorb estimated USD 23 billion in impact investments which could be materialized in the form of Public-Private Partnership (PPP) and one of the beneficiaries of foreign investment is a start-up company. It is estimated that Indonesia will create thousands of potential start-ups that will disrupt the economy of Indonesia. as a developing country in the brimming of high potential growth, among its vast youth population, there are millions of entrepreneurs with brilliant ideas that may benefit not only themselves but also society. One of the steps for investing in impact investment is screening and scoring the ESG and SDG Alignment using standardized and tested methods created by accredited international institutions. Start-ups that are still in the early-stage phase is rather very difficult to be assessed using the currently available international standard methodology, therefore making early-stage start-ups is out of reach for Impact Investment and early-stage start-ups have high potential in multiplying its valuation to drastically increase venture capital profits, creating an assessment tool is necessary to eliminate lose opportunity. Venture capital requires an assessment tool for their investment process, especially for earlystage start-ups and currently, there are yet such scoring methodologies or standards that are suited for Indonesian early-stage start-up. Many start-ups in their early don’t have adequate resources to implement an ESG framework or commit any SDG alignment by applying established international ESG framework and standards. But there are few start-ups that commit to ESG and SDG Value to their business model that create social and environmental impact and at the same time profiting as a business. The result of this research is to create a simplified Impact Investment evaluation tool based on ISS ESG impact rating and MSCI ESG SDG alignment assessment methodology that will be adjusted to for Indonesian early-stage screening purpose and to be implemented in Venture capital preliminary in business process. Investors especially venture capital allowed to invest their impact investment fund in earl-stage start-up while at the same time adhering to investment rules that refer to the ESG framework that has been standardized and regulated by several organizations. By investing in early-stage start-up, investors have a potential to grow and profited from their portfolio significantly while on the other hand bringing positive impact to environment and social.