The Investment Consultants Sustainability Working Group - United States announced today that the group’s steering committee has voted to support the ESG Data Convergence Project with the objective of improving data disclosure and reporting on standardized environmental, sustainability and governance (“ESG") metrics for private companies
Atlanta, Boston, Chicago, Cincinnati, New York, San Francisco, St. Louis, April 26, 2022 - The Investment Consultants Sustainability Working Group - United States (“ICSWG-US”) announced today that the group’s steering committee has voted to support the ESG Data Convergence Project with the objective of improving data disclosure and reporting on standardized environmental, sustainability and governance (“ESG”) metrics for private companies. The ICSWG-US is a collaboration among 17 investment consulting firms, representing more than $33 trillion in assets under advisement. It was established in 2021 to engage with its collective stakeholders and empower asset owners and their ultimate beneficiaries to advance sustainable investment practices across the investment industry.
The ESG Data Convergence Project was launched in September 2021 by leading global General Partners (“GPs”) and Limited Partners (“LPs”) that partnered to align on a standardized set of ESG metrics and mechanism for comparative reporting. The objective is to streamline the private investment industry’s historically fragmented approach to collecting and reporting ESG data in order to create a critical mass of meaningful, performance based, comparable ESG data from private companies. This allows GPs and portfolio companies to benchmark their current positions and generate progress toward ESG improvements while enabling greater transparency and more comparable portfolio information for LPs.
To create this convergence, the participating firms have agreed to report on a core set of ESG metrics across six categories drawn from existing frameworks. The categories include greenhouse gas emissions, renewable energy, board diversity, work-related injuries, net new hires, and employee engagement. For the 2021 calendar year, GPs will track and report the agreed-upon metrics in a standardized format for underlying portfolio companies. The data will be shared directly with invested LPs and aggregated into an anonymized benchmark by Boston Consulting Group (BCG), which is supporting the overall effort. Participating firms plan to meet annually to assess the prior year’s data, and to refine and build on the initial metrics, prioritizing materiality. This collaboration is intended to be a long-term mechanism to increase the quality, availability, and comparability of ESG data in private markets.
The project is open to any private market investment managers who wish to join and agree to support the principles of the work. The effort encourages private market industry stakeholders to work together to gather better, decision useful ESG data in order to generate deeper insight into ESG factors and their relationship to financial outcomes, and, ultimately, to drive greater progress on critical ESG issues.
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The Investment Consultants Sustainable Working Group - United States (ICSWG-US) is a collaboration among investment consulting firms to engage with its collective stakeholders and empower asset owners and their ultimate beneficiaries to advance sustainable investment practices across the investment industry. The ICSWG-US aims to support sustainable investment practices across institutional asset owners and asset managers. Through this effort, ICSWG-US members seeks to provide perspectives from the consultant community and be a resource on activities such as standardization of environmental, social and governance (“ESG”) integration and climate-related reporting, regulations, and innovations.
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