Pushing Forward: Responsible Investing Practices of VC Limited Partners with a Deep Dive on Responsible AI and Data, a New White Paper from Project Liberty Institute and VentureESG
The first-of-its-kind study of American and European limited partners (LPs) reveals that a 75%-majority of those surveyed consider the negative externalities of data and AI technology a significant long-term investment risk.
Project Liberty Institute, in collaboration with VentureESG, today announces findings from the world’s first comprehensive study of Limited Partners and their views on responsible investment in data and AI technologies. The initiative, conducted in partnership with VentureESG – which maintains the world’s largest investor community on responsible investment and ESG with over 400 venture capital firms and 100 limited partners – provides unprecedented insights into how major Limited Partners, which allocate trillions of USD in assets and form the foundation of the technology investment ecosystem, approach these critical issues.
Shaping Tomorrow’s Tech Economy: The Power of Limited Partners
Limited Partners—the pension funds, endowments, state funds, and other institutions that provide capital to venture capital firms—form the bedrock of technology investment. Through an extensive transatlantic dialogue engaging over 50 influential institutions across the EU, UK, United States, and Canada by Project Liberty Institute, VentureESG, and our partner Omidyar Network, this pioneering process has uncovered critical insights about the future of responsible tech investment.
“Limited Partners have outsized influence over the future of data and AI. They sit at the top of the innovation ecosystem pyramid by capitalizing the VC funds that invest in the next generation of technology,” notes Paul Fehlinger, Director of Policy, Governance Innovation & Impact at Project Liberty Institute who leads LP and VC engagements. “If we want to ensure that future data and AI businesses generate not just profits but also contribute to building a better data economy, the over 50 LPs we actively engaged in this pioneering transatlantic initiative and their peers have a crucial role to play. These findings show us that investors are ready for change.”
“The building blocks of a more equitable digital economy are set well before the first line of code is written, beginning with how capital flows into innovation,” notes Sheila Warren, CEO of Project Liberty Institute. “Limited Partners are uniquely positioned to catalyze a paradigm shift in how we approach data and AI investments. By aligning financial returns with ethical innovation, we have an opportunity to build a digital economy that empowers individuals with greater voice, choice, and stake.”
“Limited Partners are uniquely positioned to catalyze a paradigm shift in how we approach data and AI investments. By aligning financial returns with ethical innovation, we have an opportunity to build a digital economy that empowers individuals with greater voice, choice, and stake.”
Sheila Warren, CEO of Project Liberty Institute
High Risk Awareness Meets Implementation Gap
The research reveals that 75% of surveyed LPs believe failing to address negative externalities of data and AI technology poses a significant long-term investment risk. While many LPs demonstrate an acute awareness of Web 2.0’s unintended consequences around data agency, mental health, and polarization, they struggle to identify which best practices to adopt to mitigate similar issues in AI and data technologies.
Industry-Wide Search for Standards
As captured by one European state LP: “We all understand that this is an acute topic that we need to seriously address, but we simply don’t really understand yet what good looks like with regards to data and AI.” This sentiment was echoed across geographies, with varying perspectives on the maturity of data and AI risk assessment.
Critical Expertise Deficit
A particularly concerning finding is that only 19% of respondents felt they had sufficient internal expertise to develop specific responsible investment approaches for data and AI, compared to 75% for ESG in general. This highlights the broader challenge LPs face in conceptualizing investment in a fair data economy.
“Through our joint initiative, we’ve seen that LPs are acutely aware of the challenges ahead but need support in developing practical solutions,” says Johannes Lenhard, Co-Founder and Co-Director of VentureESG. “This presents a unique opportunity to avoid repeating early implementation challenges we saw with ESG adoption. What’s clear is that we need greater harmonization and collaboration between LPs on data and AI investment approaches.”
“What’s clear is that we need greater harmonization and collaboration between LPs on data and AI investment approaches.”
Johannes Lenhard, Co-Founder and Co-Director of VentureESG
The study found that 88% of LP respondents expressed interest in having data and AI-specific evidence-based due diligence questions for VC funds, while 75% indicated interest in participating in specific training on responsible data and AI approaches.
Project Liberty Institute’s 2025 Strategic Response
Building on these insights, and the recommendations of the Project Liberty Fair Data Task Force that highlight the need for catalyzing smart capital, Project Liberty Institute will accelerate its work with capital markets in 2025 through several strategic partnerships:
- Global Expansion with VentureESG: Leveraging VentureESG’s unique global community to expand LP work across the Atlantic and into Asia, developing concrete tools and frameworks with their community of 100 Limited Partners and 400 General Partners.
- Impact Investment: Explore how impact VCs approach advancing a better data and AI economy.
- Executive Education: Launching an executive LP program focused on responsible investment in data and AI, in partnership with RFK Compass and Omidyar Network.
- Systemic Change with Family Offices: Collaboration with leaders to work with family offices and impact investors to create systemic investment frameworks for a fair data economy.
“This initiative exemplifies exactly how Project Liberty Institute drives impact by combining high-level stakeholder engagement with rigorous baseline research,” says Jeb Bell, Head of Insights and Academic Partnerships. “By bringing together influential LPs across major financial hubs while establishing concrete evidence baselines, we’re creating the foundation needed for systemic change in how technology investments are evaluated. Project Liberty Institute is committed to help catalyze the frameworks, tools, and community needed to make responsible investment in AI and data the norm, not the exception.”
AI Action Summit Launch: Charting the Path Forward to a Fair Data and AI Economy
These findings of the transatlantic LP Process will be showcased at a dedicated official side event during the AI Action Summit 2025’s Business Day in Paris. “The Future of Responsible Investment in AI & Data: A Transatlantic LP Perspective” will be held on February 11, 2025, at Station F, bringing together leading voices from across the investment ecosystem to chart concrete steps toward responsible innovation in data and AI. Find out more about the launch event here.