Ramanan Raghavendran, Managing Partner at Amasia
Amasia, a venture capital firm focused on sustainability and climate, has announced the development of its impact assessment framework to evaluate and manage investee companies’ climate impact. The firm has collaborated with Malk Partners, an advisor on impact and ESG to private investment firms, to introduce this framework.
The framework was created in response to the increasing interest in climate tech and sustainability startups. Despite growing regulatory requirements for companies to disclose their climate impact and risks, there is still a lack of a universal sustainability reporting standard. This poses a challenge for maximizing positive environmental impact, particularly for tech startups and their investors.
To address this challenge, Amasia has designed a framework that assesses potential investee companies’ impact potential on a three-point scale across five impact qualities.
“Our impact framework guides our investment decisions and monitors our portfolio’s impact post-investment. By aligning our investment decisions with our climate-focused thesis, this framework enables us to evaluate a company’s impact potential more comprehensively,” explained Ramanan Raghavendran, Managing Partner at Amasia, in an email to e27.
“The framework also provides a common language for impact assessment that can be understood by companies and other stakeholders. We believe that our portfolio companies can enhance their impact by using this framework to identify areas for improving their impact potential and guiding their business decisions.”
Amasia has drawn on principles from existing impact assessment models, such as the Impact Measurement Project (IMP) and IRIS+ by the Global Impact Investing Network (GIIN), to develop its framework. However, the firm’s framework focuses specifically on early-stage companies and climate impact, supporting Amasia’s investment thesis.
Central to the framework is the concept of Impact Screen, which evaluates a potential investee company’s impact potential across five qualities: Positive Impact, Intentionality, Scale of Impact, Depth of Impact, and Additionality. Scores for each quality help investors understand a company’s impact strengths and weaknesses, alongside other business factors, to make informed investment decisions.
When assessing potential investments, Amasia looks at how companies align with its “4 Rs of Behavior Change” investment thesis, categorized under “Positive Impact” in the Impact Screen.
Raghavendran emphasized the importance of creating a shared impact language that suits the firm’s investment thesis, noting that existing impact assessment models may not cater to the needs of early-stage companies and investors.
Looking ahead, Amasia plans to continue collaborating with Malk Partners and evolving its impact assessment methods to stay abreast of industry developments.
Image Credit: Amasia
This article was originally published on September 14, 2022 and discusses Amasia’s introduction of an impact assessment framework for climate tech companies.
The post Amasia introduces impact assessment framework for climate tech companies first appeared on e27.
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