New ESG and Impact evaluation methodology for the EdTech industry.

EdTechX Holdings (NASDAQ : EDTXU) & IBIS Capital to assist impact investors & edtechs with a pioneering methodology to evaluate the ESG credentials of potential target businesses in the EdTech space.

EdtechX Holdings Acquisition Corp. II (NASDAQ: EDTXU), the second EdTech-focused special purpose acquisition company (SPAC) set up by EdtechX Holdings, have launched a pioneering methodology to evaluate the ESG (environmental, social and governance) credentials of potential target businesses in the EdTech space.

Developed in partnership IBIS Capital, London based specialist education technology investment bank, the proprietary methodology is one the first of its kind in the EdTech sector, and examines seven ESG and Impact specific categories material to the EdTech sector including:

1. Reach & Affordability
2. Quality of Education / Training & Gainful of Skills & Employment
3. Efficacy & Sustainability
4. Customer Privacy & Data Security
5. Responsible Selling and Marketing Practices
6. Employee Engagement, Diversity & Inclusion
7. Business Ethics & Competitive Behaviour

The pioneering methodology aims to attract and assist impact investors by helping them to accurately assess the efficacy of ESG and impact initiatives using measurable key performance indicators within each of the seven EdTech-specific categories, such as the number of students enrolled (including those enrolled from underserved geographies and low-income households), course completion rates and job-placement rates, and will highlight the strengths, weaknesses, and risks of potential investments in the sector.

The comprehensive methodology is also intended to help Edtech Companies to perform a base line assessment of their ESG policies and impact strategies.

EdtechX Holdings Acquisition Corp. II will be the first SPAC to evaluate potential investments in this way, and endorses the ‘SPACs for Good’ campaign launched last year by co-founders Benjamin Vedrenne-Cloquet and Charles McIntyre, with a pledge to grant 4% of their SPAC founders shares to not-for-profit initiatives which support the digitalisation of education. The campaign also encourages other SPAC founders and sponsor teams to pledge a minimum of 1% of their founders shares as a grant for the same causes.

Faced with the rapid shift to a more remote or hybrid learning model, coupled with the advancements in the field of education technology accelerated by the Covid-19 pandemic, the co-founders hope to establish the ‘SPACs for Good’ campaign as a market standard, and expect the new evaluation methodology “to support a shift towards ESG excellence in the sector”, urging EdTech companies to “embrace the relevant ESG factors required to ensure the success of the model in broadening accessibility of digital education”.

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This article was originally published in the X Report — a monthly newsletter published by EdTechX which shares features based on current trends in the world of learning and training.