CalPERS, Carlyle lead global push on ESG reporting

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(Businesshala) – A group of global private equity firms and pension funds managing assets worth more than $4 trillion said on Thursday they are looking to standardize reporting on the environmental, social and corporate governance (ESG) performance of portfolio companies. have agreed to.

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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 other metrics across companies in their portfolios.

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The partnership comes at a time when companies, investors and regulators are calling for more sustainable and inclusive ways of conducting business amid climate change concerns and diversity.

No universally accepted method of producing ESG metrics exists, allowing investors to access individual data from companies as well as individual scores from ESG rating firms and through an alphabet soup of acronyms representing different reporting standards. You have to scramble to sort through.

“We have found it challenging to effectively measure impact across our private equity portfolio because of the multitude of frameworks and definitions used,” said Marcy Frost, chief executive officer of Calparse.

The investor group also includes Canada Pension Plan Investment Board (CPPIB), Blackstone Inc., EQT AB of Sweden, Permira and CVC Capital Partners.

Under this initiative, private equity firms will collect and report ESG metrics from their portfolio companies from this year. The consulting firm, Boston Consulting Group, will aggregate the data into an undisclosed benchmark.

The founding group plans to meet on an annual basis to assess last year’s figures and build on preliminary metrics, the statement said.

“We were all headed in different directions to achieve the same goals,” Megan Starr, Carlyle’s head of global effects, said in an interview. “It’s really performance data from the companies themselves and it’s not fundamentally competitive with anything that’s in the market.”

The group said it would be open to any other private equity firm or investor who wishes to join and contribute to its work.

Reporting by Sohini Poddar in Bengaluru and Chibuike Oguh in New York; Editing by Soumyadev Chakraborty and Margarita Choy

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