August 7, 2023

ESG Reporting in Europe: Aligning on the Metrics that Matter

In European markets, investor demand and emerging regulations [such as the recently announced European Sustainability Reporting Standards (ESRS)] are driving increased transparency and disclosure for the impact of sustainability factors on investment activities. However, the fragmented landscape of standards, frameworks, and questionnaires has made it challenging for investors to consolidate how they report on ESG metrics and accurately measure performance across portfolios.

To help bridge the gap, Novata is supporting the public launch of Invest Europe’s ESG Reporting Guidelines. Invest Europe represents Europe’s private equity, venture capital, and infrastructure sectors, as well as their investors. By making these guidelines available beyond its membership, the organization aims to ensure investors and other stakeholders understand how GPs are approaching sustainability and the main impacts of investments on relevant sustainability factors.   

Aligning on the Metrics that Matter

Environmental, social, and governance factors have become fundamental investment considerations, with as many as 70% of LPs headquartered in Europe agreeing that ESG commitments influence valuation premiums. The comparability of ESG data is essential to understanding performance across these key sustainability factors. Without a standardized approach, it becomes challenging to truly understand performance or use ESG data to inform interventions that improve performance. 

Invest Europe built its reporting template to enable investors to track company performance and understand long-term value. The metrics included in the template align with existing industry initiatives, standards, frameworks, or regulations to promote convergence and alignment on metrics. 

ESG Reporting with Novata + Invest Europe

As an organization committed to making ESG simple for the private markets, promoting standardization and consistency in ESG reporting is key to achieving Novata’s mission. Novata is the first technology provider to integrate Invest Europe’s framework. We believe that integrating Invest Europe’s guidelines into the Novata platform supports firms to better assess ESG performance, enable efficient reporting, and move toward greater adoption of common ESG metrics and standards. 

The availability of Invest Europe’s framework enables private equity and venture capital firms in Europe to determine a starting point for metric selection so they can easily collect, analyze, and benchmark ESG data directly in the Novata platform. Learn more about how Novata can simplify ESG data management.