ESG Risk Management System for LoftyInc Capital

We develop a tailored ESG Risk Management System for LoftyInc Capital, an African venture capital investor. 

Technology businesses can scale quickly, but their risks are not always captured by traditional ESG frameworks. Issues such as data privacy, algorithmic bias, digital exclusion, market concentration and access to remedy can materially affect both people and business value, yet they are often difficult for investors to assess through standard due diligence processes. 

Building on the Responsible Investment in Technology guidance previously developed by Steward Redqueen with DEG and AfricaGrow, AfricaGrow supported the next step: applying the guidance in practice with LoftyInc Capital. Steward Redqueen worked closely with the LoftyInc Capital team to develop a tailored ESG Risk Management System for its Alpha Fund. The system embedded responsible technology considerations across the investment lifecycle, from screening and due diligence to monitoring and exit. A central part of the work was translating emerging technology risks into practical investment questions and building a fit-for-purpose due diligence tool. This tool democratised the ESG due diligence process, giving the investment team a streamlined way to assess risks linked to data use, algorithms, digital access, market influence and user protection alongside more established environmental, labour and governance topics. 

The approach was tested directly with the investment team through virtual training and an in-person workshop in Lagos, using real investment case examples. The collaboration also extended beyond the fund itself through an ecosystem event convening investors and other stakeholders to discuss responsible investment in technology and emerging digital risks.  

The project helped move responsible investment in technology from guidance to implementation. By applying the framework in a live venture capital setting, AfricaGrow, LoftyInc Capital and Steward Redqueen demonstrated how technology-related ESG risks can be integrated into investment decision-making in a practical, commercially relevant way.