Key themes from SEP’s 2024 Responsible investment report
Scaling sustainably
E,S, G. Three letters that have come to dominate the agenda for companies and investors alike. While recent headlines have declared the so-called "death of Environmental, Social, Governance initiatives” our focus on sustainability has never been greater.
We believe that sustainable investing is more than just a passing trend - it's a strategic approach to driving growth and future-proofing businesses. Sustainable practices enhance operational efficiency, unlock new revenue opportunities, and ensure companies can adapt to an evolving global market.
As investors in enterprise software and technology scaleups, our commitment goes beyond just growth capital. We take a long-term perspective and build powerful partnerships with our companies, helping them to scale successfully. Our hands-on, supportive approach empowers businesses to innovate responsibly, positioning them as industry leaders while delivering lasting financial and environmental impact.
In this article, we will highlight key insights from our 2024 Responsible investment report, covering topics such as the role of artificial intelligence (AI),addressing climate change, preserving company culture at scale, and the significance of strong governance.
The role of technology in sustainability
In a world facing urgent global challenges, the need for technological innovation has never been greater. Last year marked the hottest on record, causing severe disruptions to supply chains and productivity. At the same time, there is a growing recognition of the importance of building a more inclusive workforce, where opportunities are shaped by talent and potential rather than background or identity.
Technology can and will play a pivotal role in addressing these challenges. Advanced analytics, AI, and automation are transforming the way businesses operate, helping to optimise operations, reduce waste and minimise inequalities.
However, the rise of these technologies, particularly AI, also brings challenges. Ethical concerns, such as the potential to worsen inequalities or contribute to cyberattacks, require careful consideration. As we embrace technological solutions, it is essential to ensure they are applied responsibly, underpinning sustainability rather than undermining it.
Tackling climate change in software businesses
The fight against climate change is shaping the future of markets, particularly for enterprise software companies. Climate regulation is rapidly being rolled out across Europe and B2B buyers are increasingly focused on sustainability and climate commitments when making purchasing decisions.
As investors, we recognise that we have a responsibility to help our portfolio companies measure and reduce their carbon emissions. We work closely with these companies to accelerate their climate adaptation efforts, with a particular focus on emissions measurement and aligning their operations with net-zero pathways.
In 2024 we partnered with ESG data management platform, Novata, providing carbon accounting software to help companies measure and report their emissions. This collaboration has driven a 75% increase in the number of portfolio companies calculating their carbon footprints, and we are on track to have 100% of our portfolio reporting their emissions by 2025.
Beyond measurement, our next step is supporting companies in setting realistic emissions reduction targets and aligning their operations with a net-zero pathway.
Nurturing culture in rapidly scaling teams
A company’s culture is critical to its success, especially as it scales. As small, independent teams grow, maintaining an entrepreneurial spirit while integrating new employees can be challenging. Our portfolio companies are working hard to embed diversity, equity, and inclusion(DEI) into their operations. From using gender bias decoders in recruitment to promoting transparency through gender pay gap reporting, they are taking meaningful steps to ensure their workforce is inclusive and equitable.
In an increasingly competitive talent market, employee engagement and retention are essential for sustained growth. The rise of remote and hybrid work has added new complexities to this landscape, presenting unique challenges. We’ve encouraged our portfolio companies to prioritise employee well-being and mental health, with many implementing Employee Assistance Programs (EAPs) and other resources to support their workforce.
The next generation of employees places a high value on learning and development(L&D) opportunities. To attract and retain top talent, our companies are investing in upskilling and offering sponsorships for certifications, ensuring their teams continue to grow and remain competitive in a rapidly evolving tech landscape.
“We believe in the power of our people. When employees feel secure and supported, they naturally thrive and contribute their best. That's why we prioritise their wellbeing and invest in their ongoing development.” Rachna Karwasra, VP Operations, Tyk
Governance and corporate accountability
Good governance is the foundation on which sustainable businesses are built. As investors, we collaborate closely with our portfolio companies to strengthen their governance structures, focusing on key areas such as risk management, compliance, and data security. Central to this effort is fostering a culture of trust, transparency, and accountability across all levels of the business.
“Connecting all colleagues to our strategic goals is critical to our values and business alignment.” Emily Farrow, CPO, Peppermint Technology
One crucial element of this governance framework is cybersecurity. As investors in enterprise software companies, ensuring data security and safeguarding against cyberattacks are among our top priorities. The recent cybersecurity breach involving CrowdStrike, which disrupted millions of Microsoft Windows users, underscores the critical need for robust risk management strategies and effective incident response protocols.
Executive-level sponsors are crucial in driving a company’s sustainability agenda, ensuring that environmental, social, and governance priorities are deeply integrated into long-term business strategies. At the board level, these leaders advocate for responsible practices that align with both company goals and broader societal expectations. Recognising the importance of this, we actively encourage our portfolio companies to appoint ESG sponsors to champion these efforts. 65% of our portfolio companies now have a dedicated C-level advocate for ESG, reflecting the growing commitment to sustainable business practices at the highest level.
Conclusion: Sustainable growth
Sustainability is at the heart of our approach to value creation, not only because it’s the right thing to do but because it drives financial returns and fosters long-term resilience. However, navigating the complex and often confusing ESG landscape can be a major challenge for many companies. Our Sustainable Growth Framework offers clear guidance, focusing on the most material issues for growth-stage software companies. It provides a roadmap for scaling sustainably in a rapidly evolving global market. By assessing each company’s sustainability performance and delivering actionable strategies, we support responsible growth for the long term.
We are investors in innovative companies and believe in the power of technology as a force for good. Our approach not only drives sustainable growth for individual businesses but also drives progress towards real global change.
Download our 2024 Responsible investment report here.
Key themes from SEP’s 2024 Responsible investment report
Scaling sustainably
E,S, G. Three letters that have come to dominate the agenda for companies and investors alike. While recent headlines have declared the so-called "death of Environmental, Social, Governance initiatives” our focus on sustainability has never been greater.
We believe that sustainable investing is more than just a passing trend - it's a strategic approach to driving growth and future-proofing businesses. Sustainable practices enhance operational efficiency, unlock new revenue opportunities, and ensure companies can adapt to an evolving global market.
As investors in enterprise software and technology scaleups, our commitment goes beyond just growth capital. We take a long-term perspective and build powerful partnerships with our companies, helping them to scale successfully. Our hands-on, supportive approach empowers businesses to innovate responsibly, positioning them as industry leaders while delivering lasting financial and environmental impact.
In this article, we will highlight key insights from our 2024 Responsible investment report, covering topics such as the role of artificial intelligence (AI),addressing climate change, preserving company culture at scale, and the significance of strong governance.
The role of technology in sustainability
In a world facing urgent global challenges, the need for technological innovation has never been greater. Last year marked the hottest on record, causing severe disruptions to supply chains and productivity. At the same time, there is a growing recognition of the importance of building a more inclusive workforce, where opportunities are shaped by talent and potential rather than background or identity.
Technology can and will play a pivotal role in addressing these challenges. Advanced analytics, AI, and automation are transforming the way businesses operate, helping to optimise operations, reduce waste and minimise inequalities.
However, the rise of these technologies, particularly AI, also brings challenges. Ethical concerns, such as the potential to worsen inequalities or contribute to cyberattacks, require careful consideration. As we embrace technological solutions, it is essential to ensure they are applied responsibly, underpinning sustainability rather than undermining it.
Tackling climate change in software businesses
The fight against climate change is shaping the future of markets, particularly for enterprise software companies. Climate regulation is rapidly being rolled out across Europe and B2B buyers are increasingly focused on sustainability and climate commitments when making purchasing decisions.
As investors, we recognise that we have a responsibility to help our portfolio companies measure and reduce their carbon emissions. We work closely with these companies to accelerate their climate adaptation efforts, with a particular focus on emissions measurement and aligning their operations with net-zero pathways.
In 2024 we partnered with ESG data management platform, Novata, providing carbon accounting software to help companies measure and report their emissions. This collaboration has driven a 75% increase in the number of portfolio companies calculating their carbon footprints, and we are on track to have 100% of our portfolio reporting their emissions by 2025.
Beyond measurement, our next step is supporting companies in setting realistic emissions reduction targets and aligning their operations with a net-zero pathway.
Nurturing culture in rapidly scaling teams
A company’s culture is critical to its success, especially as it scales. As small, independent teams grow, maintaining an entrepreneurial spirit while integrating new employees can be challenging. Our portfolio companies are working hard to embed diversity, equity, and inclusion(DEI) into their operations. From using gender bias decoders in recruitment to promoting transparency through gender pay gap reporting, they are taking meaningful steps to ensure their workforce is inclusive and equitable.
In an increasingly competitive talent market, employee engagement and retention are essential for sustained growth. The rise of remote and hybrid work has added new complexities to this landscape, presenting unique challenges. We’ve encouraged our portfolio companies to prioritise employee well-being and mental health, with many implementing Employee Assistance Programs (EAPs) and other resources to support their workforce.
The next generation of employees places a high value on learning and development(L&D) opportunities. To attract and retain top talent, our companies are investing in upskilling and offering sponsorships for certifications, ensuring their teams continue to grow and remain competitive in a rapidly evolving tech landscape.
“We believe in the power of our people. When employees feel secure and supported, they naturally thrive and contribute their best. That's why we prioritise their wellbeing and invest in their ongoing development.” Rachna Karwasra, VP Operations, Tyk
Governance and corporate accountability
Good governance is the foundation on which sustainable businesses are built. As investors, we collaborate closely with our portfolio companies to strengthen their governance structures, focusing on key areas such as risk management, compliance, and data security. Central to this effort is fostering a culture of trust, transparency, and accountability across all levels of the business.
“Connecting all colleagues to our strategic goals is critical to our values and business alignment.” Emily Farrow, CPO, Peppermint Technology
One crucial element of this governance framework is cybersecurity. As investors in enterprise software companies, ensuring data security and safeguarding against cyberattacks are among our top priorities. The recent cybersecurity breach involving CrowdStrike, which disrupted millions of Microsoft Windows users, underscores the critical need for robust risk management strategies and effective incident response protocols.
Executive-level sponsors are crucial in driving a company’s sustainability agenda, ensuring that environmental, social, and governance priorities are deeply integrated into long-term business strategies. At the board level, these leaders advocate for responsible practices that align with both company goals and broader societal expectations. Recognising the importance of this, we actively encourage our portfolio companies to appoint ESG sponsors to champion these efforts. 65% of our portfolio companies now have a dedicated C-level advocate for ESG, reflecting the growing commitment to sustainable business practices at the highest level.
Conclusion: Sustainable growth
Sustainability is at the heart of our approach to value creation, not only because it’s the right thing to do but because it drives financial returns and fosters long-term resilience. However, navigating the complex and often confusing ESG landscape can be a major challenge for many companies. Our Sustainable Growth Framework offers clear guidance, focusing on the most material issues for growth-stage software companies. It provides a roadmap for scaling sustainably in a rapidly evolving global market. By assessing each company’s sustainability performance and delivering actionable strategies, we support responsible growth for the long term.
We are investors in innovative companies and believe in the power of technology as a force for good. Our approach not only drives sustainable growth for individual businesses but also drives progress towards real global change.
Download our 2024 Responsible investment report here.
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