From Confusion to Convergence-ESG Data Project

The aim of the Project is to standardize and streamline ESG data for private equity investors so they can create more transparent information on portfolio companies. Private Equity Investors need reliable metrics in order to compare investments across their portfolios. But there’s currently no comparable set-up with regards to how much must be submitted about each metric or which priorities come first on any given list (the market being splintered).
For six different types of environmental issues like energy efficiency levels, among other things there are detailed short guidance handbooks which provide clear direction as well as Q&A from regulatory bodies and others experienced with these matters. Just another step in working out the kinks in sustainability reporting across the sector.

The Institutional Limited Partners Association (ILPA) has published a standardised set of ESG metrics and a mechanism for comparative reporting. A number of significant global LPs and GPs have got together to produce a standardised set of ESG metrics for use by the private equity industry when collecting information.

The aim of the Project is to standardise and streamline the collection and reporting of ESG data to facilitate the creation of reliable and more transparent information on portfolio companies so that private equity investors can refer to comparable ESG data across their portfolios based on meaningful metrics. As the Executive Summary to the Project’s overview document puts it, convergence is needed because, currently, “ESG data is a mess” and “the market is splintered”.

For each of the six ESG metrics there is more detail on what must be collected and submitted in a short guidance handbook. This includes metrics, definitions, reportable units, links to further sources and guidance and references to related frameworks. The guidance also includes a glossary of common variables and a brief description of the data collection process and governance and guidance on data quality.

For the remainder of this 2021 calendar year, GPs will track and report on these six metrics for their underlying portfolio companies using a standardised format. The collected data will be shared directly with the investors/LPs but firms will also need to provide it to Boston Consulting Group (BCG) which will aggregate the data on an anonymised basis and produce a benchmark.

The Institutional Limited Partners Association is a trade organization for institutions that invest in private equity. They have offices in Washington, D.C. and Toronto, ON.
Sustainability Reporting and the scales of justice

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ESG: The New Way of Doing Business in Toronto, ON

Business and organizational sustainability is a complex issue in Toronto, with many stakeholders and perspectives. It’s also an area where the stakes are high – if we don’t get it right, there will be dire consequences for our communities and the planet.

The good news is that more investors are taking notice of the benefits of investing in ESG principles when they invest inToronto companies and organizations. In fact, over the past decade institutional investors have been increasingly incorporating Environmental, Social and Governance factors into their investment decisions. And soon it will be impossible to win any RFP’s without it.

We want everyone (not just big institutions inToronto) to be able to incorporate ESG-related risk into their actions because Companies that don’t adapt to these changes will not survive. This change has many companies inToronto scrambling to figure out how they can stay competitive and be profitable while also contributing to a better future.

ESG The Report is one solution that helps businesses inToronto find their niche in this new landscape by providing information on risks and opportunities related to environmental, social and governance factors affecting them today. Our report offers insights into what investors are looking for from companies inToronto and around the globe.

ESG Frameworks provide investors with insight into how companies are performing in terms of corporate governance, (non-corporate entities governance issues) social issues, labour standards and environmental impact. Ask about our ESG Frameworks package to help you get started on making your company, department or organization diverse, equitable and inclusive for all stakeholders.