GPs have struggled with a mounting volume of bespoke ESG data requests from their LPs, while their underlying portfolio companies navigate an increasingly complex set of ESG frameworks. Also, in GPs’ interaction with current or prospective portfolio companies, they have been unable to draw on meaningful private market data to develop an understanding of their own relative performance on key dimensions.
The EDCI helps GPs address these challenges. It simplifies their process of reporting to LPs by using standard definitions and templated methods, and provides them with benchmark-derived insights into how their portfolio companies compare relative to their peers.
What does it mean for GPs to be part of this collaboration? To participate, GPs agree to:
- Determine the funds/strategies that will be part of the project (while we recognize GPs may start with a subset of their investment strategies, the expectation is this will increase over time, as feasible).
- Change their internal data collection system to track the six categories of KPIs and associated segmentation/normalization KPIs.
- Abide by the ESG Metrics for Investor Reporting Handbook to the extent possible, and explain instances of deviation.
- As requested, supply the EDCI KPIs to LPs invested in a particular strategy, preferably using the standard template (available here).
- As soon as feasible, but by April 30 each year, provide to central aggregator the above data for the prior calendar year, anonymized by company.
- Agree to be publicly associated with the effort.
- Encourage LPs to align with this effort.
Voluntarily serve on working groups or self-nominate to join the steering committee.
GPs have struggled with a mounting volume of bespoke ESG data requests from their LPs, while their underlying portfolio companies navigate an increasingly complex set of ESG frameworks. Also, in GPs’ interaction with current or prospective portfolio companies, they have been unable to draw on meaningful private market data to develop an understanding of their own relative performance on key dimensions.
The EDCI helps GPs address these challenges. It simplifies their process of reporting to LPs by using standard definitions and templated methods, and provides them with benchmark-derived insights into how their portfolio companies compare relative to their peers.
What does it mean for GPs to be part of this collaboration? To participate, GPs agree to:
- Determine the funds/strategies that will be part of the project (while we recognize GPs may start with a subset of their investment strategies, the expectation is this will increase over time, as feasible).
- Change their internal data collection system to track the six categories of KPIs and associated segmentation/normalization KPIs.
- Abide by the ESG Metrics for Investor Reporting Handbook to the extent possible, and explain instances of deviation.
- As requested, supply the EDCI KPIs to LPs invested in a particular strategy, preferably using the standard template (available here).
- As soon as feasible, but by April 30 each year, provide to central aggregator the above data for the prior calendar year, anonymized by company.
- Agree to be publicly associated with the effort.
- Encourage LPs to align with this effort.
Voluntarily serve on working groups or self-nominate to join the steering committee.
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Our history
During the height of the Covid-19 pandemic lockdowns, when travel stopped and time constraints shifted, CalPERS and Carlyle got a small group of GPs and LPs together on videoconference to discuss the ongoing challenges they were facing with ESG data.
Despite the proliferation of ESG frameworks and ratings providers, there was still no standardized, meaningful, and performance-based data from private companies. The effect has been paralytic:
- LPs and investment managers have not been able to see standardized, comparable ESG data across their portfolios.
- GPs have struggled with a mounting volume of bespoke ESG data requests, and have been unable to know if they are making meaningful progress on the ESG topics that really matter.
- Portfolio companies have had to navigate an increasingly complex set of ESG frameworks.
- Broad-based data about ESG performance in the private investment markets has been nonexistent.
For ESG executives across the industry, this was deeply frustrating. How could they put so much time and effort into ESG topics, but still not understand whether progress was being made? There had to be a way to drive convergence around a standardized set of ESG metrics and a mechanism for comparative reporting to benefit all stakeholders in the private markets.
*Founding members include CalPERS, Carlyle, AlpInvest, APG, CPP Investments, Employees Retirement System of Rhode Island, PGGM, Pictet, PSP Investments, Wellcome Trust, Apollo, Blackstone, Bridgepoint, Cinven, CVC, EQT, Permira, and TowerBrook
The group’s conversation advanced from sharing concerns to developing a plan of action. The GPs and LPs that would become the founding members of the Initiative* spent many hours on videoconferences together as they brainstormed ideas for an ESG initiative designed specifically to meet the needs of private equity firms and their investors.
They agreed that it needed to be simple enough that the system could be enacted quickly, broad enough that it could be applicable across all of private equity, and substantial enough to provide meaningful data. The metrics would need to be consistent enough to quickly establish benchmarks but flexible enough to allow room for continuous improvement.
In September 2021, the founding members led by CalPERS and Carlyle, who became the inaugural Co-Chairs, announced the launch of the initiative. The EDCI has since experienced tremendous growth, with more than 350 GPs and LPs now part of the initiative.
The partnership is open to any GPs and LPs that wish to join and agree to support the principles of the work. We hope you’ll join us in the EDCI’s mission of generating meaningful, performance-based, and comparable ESG data for the private equity industry!
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Participating General Partners
- Development Partners International
- SK Capital Partners
- Navigate Ventures
- FTV Capital
- True North
- MML Capital Partners
- Affirma Capital
- TDR Capital
- Direct Capital
- Clearlake Capital Group
- CGE Partners
- NPM Capital
- ABC Impact
- Creador Sdn Bhd
- Tower Capital Asia Load more
Aligned Investment advisors & consultants
- Wallbrook
- Sustinvest Co. Ltd.
- Silver Regulatory Associates
- Shoreline Asset and Wealth Consulting Inc.
- Red Links
- Ocorian
- EPOCH Pi
- Creative Investment Research
- Rizoma Ventures
- Segal Marco Advisors
- Cambridge Associates
- Prime Buchholz
- Phenix Capital Group
- Meketa
- Investment Consultants Sustainability Working Group - US Load more
Participating Limited Partners & Investment Managers
- Permodalan Nasional Berhad
- Proteccion
- HRM Pension Plan
- Trans-Canada Capital, Inc.
- Columbia Threadneedle Investments
- Guy's and St. Thomas' Foundation
- Afore Sura
- AltamarCAM Partners
- Man FRM
- Healthcare of Ontario Pension Plan
- KLP
- AIMCo
- Ontario Teachers' Pension Plan
- Hamilton Lane
- Caledonia Investments PLC Load more
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Our Yearly Cycle
May - June
The metrics sprint
-
- ICSWG-US Votes to Support the ESG Data Convergence Project
- ICSWG-US Votes to Support the ESG Data Convergence Project
- ICSWG-US Votes to Support the ESG Data Convergence Project
September
New metrics confirmed and included
-
- ICSWG-US Votes to Support the ESG Data Convergence Project
- ICSWG-US Votes to Support the ESG Data Convergence Project
- ICSWG-US Votes to Support the ESG Data Convergence Project
July
Benchmark creation and publication
-
- ICSWG-US Votes to Support the ESG Data Convergence Project
- ICSWG-US Votes to Support the ESG Data Convergence Project
- ICSWG-US Votes to Support the ESG Data Convergence Project
September - April
Data collection and validation
-
- ICSWG-US Votes to Support the ESG Data Convergence Project
- ICSWG-US Votes to Support the ESG Data Convergence Project
- ICSWG-US Votes to Support the ESG Data Convergence Project
Guiding Principles for determining our metrics
Globally accepted:
Selected from the most accepted and widely regarded framework; including GRI/WEF, SASB, and TCFD (and EU SFDR as formalized)
Meaningful:
From a financial or societal impact perspective; may be specific to a given industry