Our history
During the height of the Covid-19 pandemic lockdowns, CalPERS and Carlyle got a small group of GPs and LPs together alongside BCG on videoconference to discuss the ongoing challenges they were facing with the lack of standardized, meaningful, and performance-based sustainability data from private markets.
The effect had been paralytic:
- LPs could not see standardized, comparable sustainability data across their portfolios.
- GPs were struggling with a mounting volume of bespoke data requests, while being unable to know if they were making meaningful progress on sustainable value creation.
The group began to brainstorm how to drive convergence around a standardized set of ESG metrics alongside a mechanism for comparative reportingto benefit all stakeholders in the private markets.
They focused on a ESG data solution simple enough for the market to quickly adopt, broad enough to be applicable across all of private equity, and substantial enough to provide meaningful data.
And so, in September 2021, the initiative’s founding members announced the launch of the EDCI.
Based on input from its members through working groups, the initiative has evolved significantly since its founding, with membership options now available for Infrastructure investors, Private Credit firms, and ESG Data Platforms. Going forward, the EDCI will continue to serve the private markets, supporting all stakeholders in driving sustainable value creation.
The partnership is open to any eligible members that wish to join and support the principles of the work.We hope you’ll join us!
Our yearly cycle
May – June
The annual sprint
- EDCI members are provided opportunities (e.g., surveys and focus groups) to share their experiences gathering data and their metric priorities (e.g., changes to metric definitions and potential new metrics for inclusion)
- Member-led working groups are held to discuss strategic priorities for the initiative (e.g., expansion to new asset classes)
- Inputs from member survey, focus groups, working groups and relevant industry bodies are captured and added to the Steering Committee annual sprint agenda
September
Completion of metric sprint
- Based on EDCI member feedback, Steering Committee finalizes metric changes for following year (including changes to guidance, data submission template and new metrics for inclusion)
May – August
Benchmark publication and strategic priorities
- BCG Expand validates GP submissions and released the annual EDCI benchmark to all members
- Steering Committee meetings to discuss path forward on strategic priorities
September – April
End of annual sprint and new data collection cycle
- Annual Sustainability in PE report is published using the insights from the EDCI data
- Strategic decisions for the upcoming cycle are voted on and implemented by the SteerCo
- Steering Committee elections are held
- GPs collect ESG data from their portfolio companies, and submit to the EDCI by April 30
Financial Sustainability
From its inception, the EDCI has been made possible by many hundreds of people doing additional work off the sides of their desks, alongside the full time pro bono support provided by BCG. To ensure the Initiative is well positioned to sustain its current momentum, the Steering Committee has spent considerable time working with BCG to develop a plan to build financial sustainability for the EDCI over time, so it is not perpetually reliant on ongoing pro bono contributions.
Firstly, all GPs and LPs will be able to continue to participate in the EDCI free of charge for the foreseeable future, and in doing so access the high-quality benchmark offering available to participants in the inaugural year of the initiative (i.e. 2022). To ensure the Initiative can continue to serve the industry over the long term, the Steering Committee have developed a plan to build financial sustainability.
All EDCI GPs and LPs are now able to choose to become a premium EDCI member and self-select which tier enables the most value for their organization. Read more below.
EDCI Steering Committee
The ESG Data Convergence Initiative was created by the industry, for the industry. The EDCI Steering Committee, composed of 8 LPs and 8 GPs, makes strategic decision about the initiative and is led by two Co-Chairs (one GP and one LP: currently Apollo and CPP Investments). Historically, the Steering Committee was comprised of the founding GPs and LPs that were part of the initial work to launch the initiative.
Membership on the Steering Committee will rotate to bring in perspectives from the broader participating group of LPs and GPs. Beyond the Steering Committee, all members have opportunities to be actively involved, for example by serving on working groups or providing feedback (e.g., on EDCI metric selection via a survey).
The Steering Committee conducts annual sprints to review the initiative’s progress, and our process, organization, and scope. This includes a retrospective of the initiative’s annual cycle of data collection, and consideration of proposed changes to the initiative for the following year (e.g., refinements to the EDCI metrics).
Limited Partners
General Partners
EDCI Facilitation
ILPA: Steering Committee Secretariat
ILPA serves as official Secretariat to the EDCI Steering Committee and facilitates the annual EDCI Steering Committee sprint meetings. ILPA also supports Steering Committee governance and elections.
ILPA is continually working to align LPs and GPs around important ESG issues and provides education, resources, and toolkits for private equity investors looking to integrate ESG considerations into investment programs. For more information, visit ILPA’s ESG resources page.
BCG: Initiative Administration
Boston Consulting Group administers the EDCI with responsibilities including advising the Steering Committee, supporting the EDCI membership base, and creating the annual benchmark.
BCG has supported the EDCI on a pro-bono basis since the initiative’s inception in 2021 and has been appointed by the Steering Committee to continue in this role for a three year term. In this role, BCG supports the EDCI in two primary ways:
- Serving as the third-party aggregator of anonymized data through BCG Expand, a fully owned subsidiary that specializes in benchmarking, in order to create a robust benchmark, derive research insights, and support any external publications as governed by Steering Committee approval.
- Advising the Steering Committee through its annual sprint process reviewing the initiative’s progress (including gathering and structuring participant feedback on EDCI metrics).
In its formalized role, BCG (in close collaboration with the Steering Committee) has developed a document that provides an overview of how it will support the EDCI going forward. The document provides more information on how BCG will protect sensitive member data, use that data to develop the annual EDCI benchmark and then follow the SteerCo’s guidance on how that benchmark can be used. Read the full text of the document here.
