Your business needs: What data do you need to collect, analyze, and report on? What are your goals for using this data?
Your budget: How much money are you willing to spend on building and maintaining this software and team?
Your timeline: When do you need this software and team to be up and running?
Your in-house expertise: Do you have the expertise in-house to build and maintain this software and team? If not, will you need to hire outside help?
The security of the software: Is the software secure? Will it protect your data from unauthorized access?
The ease of use of the software: Will the software be easy for your team to use?
The support for the software: Will the vendor provide good support for the software?
Providing LPs with insights into their investment thesis. By using data to analyze market, demographic and Portco trends, the competitive landscape, and potential risks and rewards, our clients have been able to provide LPs with a clear understanding of their investment thesis and why they believe it will be successful.
Demonstrating track record and performance. Our clients have used data to track their performance over time, including returns, portfolio diversification, and risk-adjusted returns. This data has helped LPs to see that our clients have a proven track record of success and that their investments are likely to be profitable.
Communicating effectively with LPs. Our clients have used data to create clear and concise dashboards that communicate their investment strategy and performance in a way that is easy for LPs to understand. This has helped to build trust and confidence with LPs and has made it more likely that they will invest in future funds.
To track progress towards their impact goals. Our clients have used their data to track the number of people they have reached, the impact they have had, and the cost-effectiveness of their programs. This data has helped them to demonstrate their impact and to make sure that they are on track to meet their goals.
To communicate their impact to stakeholders. Our clients have used my data to create Impact Reports that communicate their impact to donors, partners, and other stakeholders. These reports have helped to raise awareness of their work and to secure funding for future projects.
To benchmark their performance against other organizations. Our clients have used my data to benchmark their performance against other organizations working in the same field. This data has helped them to identify areas where they can improve and to set ambitious goals for the future.
We make this easy, so please consult with us before you try to roll your own. But if you want a simple formula here it is:
Set clear goals and objectives. What do you want to achieve by measuring your ESG performance? Do you want to improve your environmental impact, your social impact, or your governance practices? Once you know what you want to achieve, you can start to develop specific goals and objectives.
Identify the right metrics. There are many different metrics that you can use to measure your ESG performance. You need to identify the metrics that are most relevant to your business and your goals.
Some common ESG metrics include:
Environmental: Carbon emissions, water usage, waste production
Social: Employee turnover, diversity, safety
Governance: Board composition, executive compensation, risk management
Collect data. Once you have identified the right metrics, you need to collect data to measure your performance. This data can come from a variety of sources, such as internal records, external surveys, and third-party data providers.
Analyze the data. Once you have collected the data, you need to analyze it to identify trends and areas for improvement. This analysis can help you to understand your current ESG performance and to set targets for improvement.
Communicate your findings. Once you have analyzed the data, you need to communicate your findings to your stakeholders. This communication can help you to raise awareness of your ESG performance and to build trust with your stakeholders.
Get buy-in from senior management. ESG measurement is most effective when it has the support of senior management. Make sure that you have the support of your CEO and other senior leaders before you start the process.
Start small. You don't need to measure everything all at once. Start by measuring a few key metrics that are most relevant to your business. You can then expand your measurement over time.
Use a software tool. There are a number of software tools that can help you to collect, analyze, and report on your ESG data. These tools can make the process of ESG measurement much more efficient and easier.
Get help from a third party. If you don't have the resources to measure your ESG performance in-house, you can hire a third-party consultant to help you. This can be a good option if you need to measure a large number of metrics or if you need help with the analysis and reporting.
Our learning library has oodles of articles on these subjects so you can dive deep in the context of your actual reports. Book a demo to find out how.
Here are some key terms in ESG and Sustainability that you should read up on now:
Carbon emissions: The amount of carbon dioxide and other greenhouse gases emitted into the atmosphere.
Climate change: The long-term change in the Earth's climate, caused by human activities such as burning fossil fuels.
Deforestation: The clearing of forests for agricultural or development purposes.
Pollution: The presence of harmful substances in the environment.
Waste: Materials that are no longer useful and are discarded.
Climate Mitigation: actions taken by companies, organizations, and individuals to reduce greenhouse gas emissions and combat climate change
Climate Adaptation: actions taken by companies, organizations, and individuals to make themselves more resilient to the impacts of climate change
Diversity: The variety of different people and groups in a society.
Equity: The fair distribution of resources and opportunities.
Human rights: The basic rights and freedoms that all people are entitled to, regardless of their race, religion, gender, or any other status.
Labor practices: The way that businesses treat their employees.
Human Capital: A model for measuring sustainable and equitable workplaces that attract and retain top talent.
Board of directors: The group of people who are responsible for overseeing the management of a company.
Executive compensation: The amount of money that is paid to the executives of a company.
Transparency: The practice of being open and honest about information.
Accountability: The obligation to answer for one's actions.
These are just a few of the key terms in ESG and Sustainability. As you learn more about these topics, you will encounter many other terms that are important to understand. It is important to stay up-to-date on the latest developments in ESG and Sustainability, as these topics are constantly evolving.
Overall, the evidence on the relationship between ESG and financial performance is mixed. Some studies have found a positive correlation, while others have found no correlation or even a negative correlation. It is important to consider the specific industry and time period when evaluating the relationship between ESG and financial performance.
It is also important to note that ESG is not just about financial performance. ESG also includes factors such as environmental impact, social responsibility, and good governance. These factors are important for the long-term sustainability of a company, and they can also have a positive impact on the company's reputation and brand.
As a result, even if there is no clear correlation between ESG and financial performance in the short term, ESG can still be a valuable investment strategy for the long term.
Here are some tips on how to make sure you give LPs everything they are asking for when it comes to ESG reporting:
Understand your LPs' ESG priorities. The first step is to understand what your LPs are looking for in terms of ESG reporting. This will vary depending on the LPs' investment objectives, risk appetite, and ESG preferences. Once you understand their priorities, you can tailor your reporting accordingly.
Be transparent and comprehensive. LPs want to be able to trust that the information you are providing is accurate and complete. Be transparent about your ESG goals, performance, and risks. Provide comprehensive information on all of the ESG factors that are important to your LPs.
Use consistent metrics and standards. Use consistent metrics and standards when reporting on your ESG performance. This will make it easier for LPs to compare your performance to other companies and to track your progress over time.
Use clear and concise language. Avoid using jargon or technical language that your LPs may not understand. Use clear and concise language that is easy to understand.
Make your report accessible. Make your ESG report easy for LPs to find and to read. You can do this by making it available on your website or by sending it directly to your LPs.
Be responsive to feedback. LPs may have questions or feedback about your ESG reporting. Be responsive to their feedback and make changes to your reporting as needed.
Here are some additional tips for making sure your ESG reporting meets LPs' needs:
Use a standardized reporting framework. There are a number of different ESG reporting frameworks that you can use, such as the Global Reporting Initiative (GRI) or the Sustainability Accounting Standards Board (SASB). Using a standardized framework will make it easier for LPs to compare your performance to other companies.
Get independent assurance. You can get independent assurance on your ESG reporting by having it reviewed by a third party. This will help to ensure that your reporting is accurate and credible.
Continuously improve. ESG reporting is an ongoing process. You should regularly review your ESG reporting and make changes as needed to improve its accuracy, completeness, and transparency.
Yes. Our sweet spot is in helping be a valueable partner in your overall impact strategy. We take on as much of the work and analysis as you want while leaving the business management up to your and your Portco.
Yes. 100%. We benchmark against similar companies in similar regions of a similar size when we can. We also have hundreds of tables of public economic, environmental and social data that we can triangulate your results with.
Absolutely. You will have a team, in fact. One or more client success managers managing your account plus a customer success manager working directly with Portcos. On top of that you get the social and data science backgrounds of our founders to help with your strategy and communications.
It's funny you ask that. That's where we see a major difference in the work that we do compared to our competitors. We help drive actual change and we can prove it because we track those changes over time by creating and implementing a roadmap based on what we are learning from the data.
Yep. We know it's an alphabet soup out there. What's important to one LP might not be for another. So whether it's the 17 UNSDGs or the IRIS+ metrics, we've got you covered. Same data goes into making each of these reports so it get simplified by using a system like ours.
Our platform is purpose-built for this use case. We have been making it better for longer than any of our competitors, too, covering the widest range of needs of a fairly bespoke market.
HR, ERP, Recruiting, Sales/CRM, Financial, Bespoke. Our ETL service can connect to anything we can get an API credential for. So if your system has an API, chances are we can connect directly to it. If you allow direct database connections, we can do that as well. Finally, if your files are stored in buckets, we can sync those and convert as well.
Absolutely! Our reading library has 1000's of articles on a wide range of topics that we have vetted for you. Start by reading the abstract in the library and then link out to the articles themselves.
In addition to articles, we have over 70 perusable datasources that you can use as reference dashboards for your own internal analysis.
Finally, if you need us to deliver data back to your warehouse, we're set up for that too.
Yes. We love to help both in the design and implementation. And if you are worried about price, you shouldn't be. We can tailor your needs to your budget no matter what the AUM and fund stage.
Indeed! Again, it's not the size that matters. Mostly we are concerned about how to tailor your impact and ESG strategy to the effort at hand. Since our system can handle complexity it can also handle simplicity, whichever you prefer.
I wouldn't say we have a typical client profile since PE covers a wide range of features. That said, Buyouts fill the largest segment of our client portfolio.
The average client spends about $60K/year. Some more. Some less. We price per portco and by how customized you need your models and reports. If you need consulting on top of it, we do that too.
We hear we are the most adaptable and with a greater ability to put your data in context. Our benchmarking is the deepest and our data is the most detailed (we prefer to check self-reported surveys with actual systems data, for example).
4-6 months before you want to be reporting. It often takes portfolio companies a little bit to collect, connect and correct their responses.