BlackRock expands ESG reporting partnership with private investors

Published on: 12 May 2022
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ESG Outreach is an eFront® Insight solution created in collaboration with private equity investors. The technologically enabled solution assists in lowering the high costs and specialised knowledge associated with ESG monitoring. Over 2,500 General Partners have access to the solution, which has a total reach of over 70,000 private companies.

BlackRock today announced a collaboration with a group of Limited Partners and Funds of Funds to streamline and standardise ESG reporting for private markets. ESG Outreach, an eFront® Insight solution developed in collaboration with private market investors, will be used by the partners to accelerate and simplify the collection, analysis, and reporting of ESG data. The tech-enabled solution, which is aligned with existing disclosure frameworks and ESG reporting initiatives, assists in lowering the high costs of technology and specialist knowledge associated with ESG monitoring. Over 2,500 General Partners (GPs) have access to the solution, which reaches over 70,000 private companies in the eFront Insight network.

Alternative asset class investment professionals are increasingly in need of ESG data to help them identify risk and opportunities. However, due to the large number of frameworks in use and the evolving regulatory landscape, private market participants seeking to incorporate ESG factors face difficult decisions about which metrics are relevant. These difficulties are exacerbated by a lack of in-house ESG resources as well as the high cost of technology to support ESG data sourcing and analysis. Because of the lack of adoption across a single framework, LPs are unable to consolidate data across their portfolios and must frequently send time-consuming bespoke data requests to their GPs.

The ESG Outreach solution, which will be available in June 2021, will simplify and standardise these various approaches by establishing a robust reporting framework, which will include a set of universally relevant questions that align with existing reporting initiatives. It also aids in compliance with the disclosure regimes established by the Task Force on Climate-Related Financial Disclosures (TCFD) and the Sustainable Finance Disclosure Regulation (SFDR). Companies that have already aligned themselves with an existing framework can use ESG Outreach as a scalable data aggregation solution. ESG Outreach is positioned to help accelerate the availability of ESG data within private markets while also creating a benchmark of key ESG metrics by focusing on the needs of the entire ecosystem, including both LPs and GPs. The solution is an extension of BlackRock's eFront Insight, which has led the way in digitalizing private market data exchanges by combining financial and non-financial disclosures in a single location.

“Investors and managers alike are asking to better understand the impact on environmental, social and governance matters related to their investments,”

said Melissa Ferraz, Head of eFront Insight at BlackRock.

“ESG Outreach directly targets the barriers that exist in private markets ESG reporting by providing a universal solution to streamline and standardize ESG data. The solution embeds BlackRock’s experience in investment operations with the experience of our partners, helping to level the playing field no matter how far along a company is in their ESG journey. We are excited to build on our collaboration with the private market ecosystem to create greater transparency and enhanced reporting practices.”

Oliver O'Bryan, ESG Specialist at Partners Group, one of the leading partners in this initiative echoed these views, saying,

“As a global direct investor and investor into portfolio assets, we serve high volumes of demanding data requests from our clients, which we strive to process efficiently. It is also time consuming to unravel key metrics from the various frameworks in use to fulfilling regulatory reporting requirements. Our support of this initiative is based on the synergies it creates across the whole ESG data ecosystem, providing consistency between the assets we own on behalf of our clients, us as an investment manager and our clients.”

Daniel Gregor, Head of Asset Management – Indirect Strategies at Allianz Global Investors, added,

“We at AllianzGI started our sustainable investing journey over 20 years ago and were among the first 50 asset managers to sign the United Nations Principles for Responsible Investment (UN PRI) in 2007. As an active investor in Private Equity, ESG is core to our ability to generate returns. ESG reporting is key for our investment strategy and our clients. In order to facilitate data collection and seize them best we support this initiative to ensure a consistent set of data for the industry.”

Lynn Baranski, Global Head of Investments for BlackRock Private Equity Partners, commented,

“We firmly believe that transparency and data are fundamental to robust ESG analysis, and this initiative is a key priority for us as we continue to enhance the way we collect, evaluate and measure ESG data across our investments. We have been supportive of this initiative from its inception, which extends eFront Insight’s leading capabilities to provide a centralized and consistent solution for financial data in private markets to include relevant ESG metrics. We are encouraged to see the positive market response to date and excited for further adoption across private markets.”

Source: BlackRock news

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