Navigating ESG Data Collection in a Diverse Investment Landscape

If you are working in an ESG team in the private equity sector, the chances are that you'll be struggling with some universal challenges:

The Complexity of Multi-Sector Portfolios

Managing a portfolio that covers varied assets – from renewable energy installations in Scandinavia to textile enterprises in South-East Asia – presents a unique set of challenges when collecting standardized ESG data. Each sector inherently focuses on different metrics and has its unique set of priorities. For example, a renewable energy plant might prioritize carbon emissions metrics, while a manufacturing unit might highlight labor practices. Thus, obtaining a standardized set of data becomes a comprehensive task.

The Limitations of Market Data

Relying solely on market data for ESG insights is insufficient for in-depth analysis. Market data, while broad, often doesn't provide the specific, granular details necessary for accurate assessment and decision-making. Direct data from portfolio companies is essential to ensure that the insights are tailored and relevant to the particularities of our portfolio.

Processing Raw Data

Obtaining raw data is just the initial step. The subsequent challenge lies in aggregating, analyzing and verifying this information to derive actionable insights. Raw data, by its nature, requires rigorous refinement processes to be translated into useful metrics.

Communicating with LPs

A GPs responsibility doesn't end at data collection and analysis. It's imperative to relay this information to LPs in a structured, transparent manner. They seek not just quantitative metrics but also qualitative insights that can shed light on the broader impact of their investments.

Adhering to SFDR Requirements in Europe

The Sustainable Finance Disclosure Regulation (SFDR) in Europe has set stringent standards for transparency. It's imperative that ESG data is not just accurate, but also exhaustive and timely.

Dasseti ESG can help

ESG data collection, especially across a diverse multi-sector portfolio, is an intricate task that demands precision, understanding, and clear communication. Using a digital platform that allows GPs to collect ESG data directly and securely from portfolio companies, aggregate with other data sources, both qualitative and quantitative and present a clear picture of progress over a time period, could be game changing.

Dasseti ESG clients can use industry leading data collection templates from the ESG Data Convergence Initiative, The PRI, ILPA and AIMA. The flexible questionnaire tool also allows users to create their own metric collection templates to share with a host of entities in minutes.

Find out more about our unique ESG data collection solution.