A group of global private equity firms and pensions funds managing over $4 trillion in assets have joined hands to standardize reporting on environmental, social and governance (ESG) performance of portfolio companies.
The group, led by Carlyle Group and the California Public Employees’ Retirement System (CalPERS), will track data on greenhouse gas emissions, renewable energy, board diversity and some other metrics of companies in their portfolio.
The partnership comes at a time when global businesses, lawmakers and investors are increasingly asking for more sustainable and inclusive ways of conducting business amid a diversity push and heightened concerns over climate change.
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The investor group includes Canada Pension Plan Investment Board (CPPIB), Blackstone Inc, Sweden’s EQT AB, Permira and CVC Capital Partners.
Researchers Boston Consulting Group will aggregate the data into an anonymized benchmark, the statement said, adding that the group plans to meet on an annual basis to assess prior year’s data and build on initial metrics.
“We have found it challenging to effectively measure impact in our private equity portfolio because of the multitude of frameworks and definitions used,” said Marcie Frost, chief executive officer of CalPERS.
“This initiative simplifies sustainability reporting by using comparable metrics which allow us to gain insight into the investment risks and opportunities in our private markets portfolio,” Frost added.
The partnership is open to any general partners or limited partners who wish to join it, the statement said.
Source: Wall Street Journal
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