We are delighted to be recognised as a top performer in the Orbis Advisory and ITPEnergised ‘ESG Transparency Private Equity and Venture Capital Index 2021’. The annual report seeks to profile the top performers in terms of ESG reporting and performance of BVCA members, and includes insights from firms about the benefits ESG has brought to their business and how to start out on an ESG journey.
We achieved fourth place in the Index, out of 155 PE firms, thanks to our Responsible Investment practices alongside our internal social policies. The panel also highlighted our outstanding performance across Pre-Investment Due Diligence, Post-Investment Due Diligence and Exit Plan. This outstanding result represents our consistent and rigorous approach to responsible investing over the last ten years, and we are proud to be the only lower mid-market private equity firm featured in the top ten – demonstrating our culture, behaviours and processes are consistent with those of much larger managers.
In producing the index, Orbis Advisory and ITPEnergised assessed the ESG disclosure of Private Equity firms listed on the BVCA Directory and scored each against 73 criteria across two overarching themes: Responsible Investment and In-house ESG. Responsible Investing questions review the transparency of the investing company’s ESG engagement across the investment lifecycle, and are focused on their portfolio companies:
- Pre-investment due diligence
- Post-investment engagement
- Exit plan
In-house ESG questions assessed the effectiveness with which investment firms integrate ESG in-house, across five key criteria and are focused on the PE firm itself:
- Reporting
- KPI setting
- Practicable initiatives
- Policies
- External certification/benchmarking
ESG Data Convergence Project
We are also pleased to announce that we are participating in the ESG Data Convergence Project in its inaugural year. We join a set of leading global GPs and LPs that have partnered to align on a standardised set of ESG metrics and mechanisms for comparative reporting.
The project aims to move the industry away from the traditionally fragmented approach to ESG data collection, instead aiming to streamline the process to ensure all the data collected across the Private Equity industry is meaningful, performance-based and comparable. This allows PE firms and portfolio companies to benchmark their current position and measure progress toward ESG improvements, whilst also giving greater transparency and comparable information for investors.
To create this convergence, the participating firms have agreed to report on a core set of ESG metrics across six categories including greenhouse gas emissions (CO2e), renewable energy, board diversity, work-related injuries, net new hires, and employee engagement. In Spring 2022, Boston Consulting Group (BCG), who are supporting the overall effort, will then aggregate the inaugural data to create an anonymised benchmark for the 2021 calendar year.
At NorthEdge we are committed to building better businesses that are both sustainable and diverse. Both the Data Convergence Project and the ESG Transparency Index represent another set of milestones in our commitment to make a positive contribution to our people, our portfolio and our planet.
Read our latest ESG Report Taking Responsibility, to learn more about our approach to ESG, how our portfolio embed ESG within their businesses and our commitments for the year ahead.