If 2024 was the year everyone asked “Why ESG?”, 2025 was the year people started asking “How do we actually do this well?”
We dug into exactly that question in our latest whitepaper, “Beyond Compliance, Built for Context: Responsible Investment in Emerging Markets”. Here’s a taste of what we found.
Many GPs are now using ESG as a professionalisation lever: setting up boards, tightening financial controls, and formalising reporting. More mature funds are going further, reframing ESG as “exit readiness” to ensure portfolio companies can meet the governance and compliance bar expected by international acquirers and institutional capital.
But it’s not easy. Across Africa, APAC, and Latin America, fund managers in our network are navigating real structural headwinds: liquidity constraints, limited domestic capital, and geopolitical uncertainty, including shifting DFI priorities. This is fuelling what some call the “one-fund trap”, where emerging managers struggle to raise a second vehicle and are pushed toward ever-leaner fund structures. Regulatory ambiguity adds another layer of complexity. Many VCs describe taking a “Frankenstein” approach to ESG: stitching together multiple frameworks to build something that actually fits their context.
Two operational gaps stand out above the rest: climate expertise and AI governance knowledge.
Looking ahead, the ecosystem needs sector-specific tools (e.g. low-data climate calculators built for emerging market realities) and a unified voice to push back against “zombie metrics”: cut-and-paste requirements transplanted from the Global North. It also needs ESG tools that work less like static Excel snapshots and more like adaptive, longitudinal tracking platforms.
Photo by Kittitep Khotchalee on Unsplash
Want to dig deeper? Read the full whitepaper or reach out to Alexandrine directly at alexandrine@reframeventure.com.
In 2026, Reframe Venture is taking a more community-driven approach. We’re inviting members to shape our programming — from our next tools to the themes for upcoming sessions — and encouraging more direct interaction across our network.
Join the Reframe EM Community WhatsApp group via the form linked in the button below for updates, live polls, and the opportunity to exchange questions and insights with fellow VCs and LPs between community calls.
Over January and February, we hosted three geography-focused community calls. Here’s what we heard across our three regional focus areas:
“ESG has moved from voluntary storytelling to a mandatory financial report.” — Smeldy Ramirez Rufino, IDB Lab
On February 24, we welcomed Smeldy Ramirez Rufino (IDB Lab) and Denis Nakahara (Partner, MOV Investimentos) to our LatAm Community Call. Three themes dominated our call:
E as Compliance; and Opportunity. In LatAm, the regulatory landscape around sustainability reporting and climate disclosure is shifting fast. This momentum is fuelled by regulators’ desire to align with global standards to ensure LatAm’s competitiveness in international markets, alongside the region’s own growing commitment to sustainable development. Brazil now requires listed companies to obtain assurance on sustainability reports. Mexico and Chile have made IFRS S1 and S2 mandatory. And beyond compliance, institutional investors are building financing instruments that translate climate performance directly into financial returns (e.g. IDB’s first Amazonia bond, and Brazil’s ECOinvest programme).
A More Selective Market. Geopolitics reshaped capital flows in 2025. Currency volatility and tighter ESG requirements have made investors more cautious. For founders and fund managers, integrating ESG as risk management is increasingly the key to unlocking new pools of green capital — institutional, private, and sub-commercial alike.
AI and Areas to Watch. In LatAm, necessity-driven sectors are gaining momentum: energy resilience, water management, regenerative agriculture, and critical infrastructure. When it comes to AI-driven innovation, the biggest opportunities may lie in applications enabling crucial layers such as cross-border payments, trade finance, embedded financial services for SMEs, and productivity tools.
“The most important ESG development of the year has to be the ESG backlash in the US. It forces an opportunity for us working in Africa to break free from a model that was designed in Paris, added to in New York, and ratified in Brussels to measure the carbon emissions of a German auto manufacturer and instead build ESG reporting and KPIs that make sense for the continent.” — Wael Amin, Sawari Ventures
On February 3, Wael Amin (Partner, Sawari Ventures) joined our Africa Community Call with a clear message: African VCs should double down on ESG criteria that materially matter to their markets, not imported metrics designed for European economies. Here’s what to know:
Rethinking E, S, and G for Africa. ESG looks different for Africa. Climate adaptation is more urgent than carbon accounting. Financial inclusion, job creation, and access to basic services aren’t peripheral ‘S’ metrics but the total addressable market. In markets where institutions are still strengthening, strong governance is foundational. DFIs are beginning to respond to calls for reporting simplification and greater fit-for-purpose design, with growing interest in AI-assisted standardisation. But practical barriers remain: ill-adapted platforms and software costs that are prohibitive for many African GPs.
Reducing DFI Dependency. For African GPs, diversifying the LP base is critical. Fund managers need to engage local financial institutions and large family offices rather than rely on concessional capital. As African governments face debt pressures, the private sector is increasingly expected to drive growth. Building track records and demonstrating commercial success is how African GPs will attract a broader LP base. The deeper point: ESG dependency and DFI dependency are intertwined. For durable ecosystems to take root, responsible investing must be embraced even when DFIs aren’t in the room.
“There is a sense of the passing of the baton from West to East. The West seems polarised by political debates; in the East, people are being very pragmatic.” — Julien Mialaret, Eurazeo
On January 27, we hosted Julien Mialaret (Operating Partner, Eurazeo) and Tomomi Ishida (VC Investor, Energy & Environment Investment) for our APAC Community Call. Here’s the rundown:
Geopolitics is now central to the “E.” In Japan, the Green Transformation (GX) agenda has shifted from economic development to national security and energy sovereignty. Across Asia, there’s a growing sense of strategic pragmatism on climate even as the US grows more polarised. China has become a greentech powerhouse in EVs, solar, and renewable infrastructure. But the region isn’t homogeneous: India and much of Southeast Asia face a significant financing deficit for the energy transition.
AI as an Enabler? AI can assist in net-zero efforts by introducing more energy-efficient systems. That said, AI itself carries a costly energy footprint, and the electrification boom in South and Southeast Asia is creating bottlenecks across grid capacity, talent, and financing.
Regulation: Constraint and Catalyst Carbon taxes and disclosure regimes carry real cost implications, but well-crafted rules create a level playing field, especially where fossil fuels remain heavily subsidised. In Southeast Asia, for instance, residential solar producers cannot sell excess electricity back to the grid. For Julien, solving that single constraint would unlock massive distributed energy markets.
Despite mounting backlash against DEI across capital markets in 2025, research continues to show that a gender lens in investing strengthens decision-making, unlocks underserved markets, and improves governance.
On February 11, we hosted our first Deep Dive of the year with Durga Ravindran (Gender & Diversity Finance Executive, British International Investment), Anna Raptis (Founder & GP, Amplifica Capital), and ‘Tokunboh Ishmael (Managing Partner, Alitheia Capital). Here are the main takeaways:
Representation metrics are only the beginning. Action plans aren’t about rigid target ratios; best practices embed DEI conversations on socio-economic background, race, class, and caste throughout the investment lifecycle.
What it looks like in practice:
Examining board representation, employee ownership, value chains, and product design at initial deal screening.
Creating gender action plans beyond C-suite employees to transition toward gender-positive structures (e.g. ownership pools for female smallholder farmers).
Ensuring female co-founders hold proportional equity.
Applying 2X Challenge criteria and piloting BOLD (Black Ownership and Leadership for Development) to expand the lens beyond gender alone.
Where the opportunity is:
Fintech: Women represent roughly half the population but up to 80% remain underbanked.
Financial services for women navigating wealth transitions.
Pre- and post-menopausal health.
Agro-processing and household manufacturing: Sectors where female participation is already high, but capital is deeply constrained.
Where investors must be vigilant: Material risks include gender bias embedded in emerging AI systems, harms faced by frontline content moderation workers, and structural barriers that push women out of the workforce.
On March 3, we held our second Deep Dive featuring Matthew MacDevette (FMO) and Lesh Gowreesunker (AfricInvest) on AfricInvest’s MOI (Multiple of Impact) tool and the benefits and risks of translating impact outcomes into financial value that drives investment decisions. Here’s what to know:
Ex-ante tools like the MOI shape decision-making upfront. The MOI uses investment business plans and third-party proxies to estimate the net present value of societal outcomes (emissions avoided, income uplifts, improved healthcare access) and converts them into a single, comparable figure per dollar invested.
The MOI should complement qualitative metrics. Its value lies as much in the process it encourages (i.e. structured thinking about impact pathways at screening, monitored through to exit) as in the number itself. This helps address practitioner concerns that quantification frameworks tend to favour data-rich contexts, potentially excluding high-impact, data-scarce environments from accessing capital.
LPs want demonstrated intent and operational rigour around impact. GPs are increasingly expected to demonstrate how impact data informs portfolio strategy over time. The threshold differs by instrument: a social bond may qualify on business model alone, while conventional equity calls for a more active approach.
The Reframe Venture Emerging Markets Team is growing, and we are thrilled to have two new experts on board! Please welcome:
Edwina Liu, who brings a unique blend of operating, advisory, and policy experience to the team through her experiences working at SunCulture and McKinsey. She holds a Master’s of Public Policy and an MBA from the University of Oxford.
Dagmawit Mengestu, who integrates design thinking with public policy, having worked at IDEO, and holds a Masters of Public Policy from the University of Chicago.
We have a packed two months ahead:
April
APAC Community Call: Human Rights & Technology | Online | April 2nd
Breakfast Launch: Maturity Matrix for EM | Online | April 7th
This tool has been created to help member funds evaluate where they stand on ESG integration and chart a path forward.
Africa Community Call: Climate Reporting | Online | April 21st
Deep Dive: Running a Climate Fund in Emerging Markets | Online | April 27st
May
LATAM Community Call: Preparing for Exits | Online | May 5th
Deep Dive: Diversifying your LP Base | Online | May 26th
We’re also introducing a new format alongside our tool launches: Reframe ‘Office Hours’, where members can book personalised coaching slots. Watch your inbox for more details soon.
Take a look at the DEG’s Investor Guidelines for Responsible Investment in Technology.
The Questioning the Status Quo working group — fifteen investment professionals deploying capital across Africa — has released a new whitepaper on how to Rethink Venture Capital for the African Market.
Are you an emerging GP wanting to do more on climate and nature? The FMO has released an Investment Playbook to help investors step up their climate commitments, and FinDev Canada has recently published a guidance note on Scaling Nature Finance. The World Economic Forum’s note on investment opportunities at the intersection of climate and health is also worth a glance!
On the green finance front, both the EBRD and the IFC have released reports on the state of climate financing. Notably, the IFC is set to start its public consultation phase (Phase II) for its revised Sustainability Framework project in April 2026. Find out more here.
Wondering how recent developments in Iran and other major disruptions in oil supply might affect your fund and portfolio exposure? We recommend MSCI’s multi-asset playbook for timely guidance.
On an encouraging note: Morocco, Senegal, Ivory Coast and Benin are emerging as attractive destinations for venture capital funding in 2026. India is also on the rise, with Silicon Valley-based firm General Catalyst planning to deploy over 5 billion USD into the region within the next 5 years.
If you’re a VC and not yet a member, contact alexandrine@reframeventure.com for more information on how to join! We would love to have you on board.
If you are an LP, reach out to Johannes directly at johannes@reframeventure.com, and we will bring you into our community of 120+ institutional LPs to push the ecosystem forward together.
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