Novata convenes big names from ESG and investment to advise on data

ESG data platform Novata has formed an advisory group of private markets sustainability experts.

Nine members with experience ranging from managing pension fund investments to academic sustainability research have agreed to serve on Novata’s ESG Advisory Council as an “independent sounding board”, a statement from Novata said. The council will help Novata respond to fast-changing market needs and to its customer base of investors, many of which have only recently committed to ESG strategies, the statement said.

Novata launched last September as a public-benefit corporation with the backing of four organisations including S&P Global and the private markets firm Hamilton Lane, as well as the Ford Foundation and Omidyar Network, philanthropy groups managing impact investing strategies.

Margot Brandenburg, a senior programme officer for Ford Foundation’s impact investing group is co-chairing the ESG council alongside Robert Eccles, founding chairman of the widely used reporting framework Sustainability Accounting Standards Board.

Other members include Ben Meng, former chief investment officer of the $482 billion California Public Employees Retirement System, and Elizabeth Corley, who previously led Allianz Global Investors as chief executive and now chairs the Impact Investing Institute.

“These are industry experts who can look at the intersection of regulation and emerging [ESG] frameworks… to help us figure out what we should be doing to serve this ecosystem,” Alex Friedman, Novata’s co-founder and chief executive, told New Private Markets in an interview.

Novata created an earlier advisory council when it launched which included shareholding firms such as Clearlake Capital Group, Kohlberg & Co, and Vistria Group as members. Friedman described the GP-led group as a “co-op model” made up of firms likely to use its services to “build against their needs”.

To maintain status as a mission-focused for-profit corporation, Novata’s investors have pledged to donate any investment proceeds to non-profit organisations, the company’s statement said.

“We’re not creating a product to make a lot of money and then sell,” Friedman said. “The goal here is to build a durable solution for private companies so that capital becomes as much of a positive lever for change as can be.”

Novata’s goal is to help standardise a fragmented ESG reporting landscape by providing private markets investors with an “unbiased and flexible” platform to report and benchmark data, according to the Novata statement. Its software gathers and compares 10 of the most-cited ESG metrics found in widely used but disparate ESG frameworks including SASB, the Task Force on Climate-related Financial Disclosures and the Global Reporting Initiative.

Earlier this month, Novata said it was bolstering its services through a partnership with Persefoni, another data platform which specialises in climate-focused reporting.

One of the broadest initiatives yet is the ESG Data Convergence Project, which a group of institutional investors and asset managers launched last September aiming to benchmark ESG data.

Led by The Carlyle Group and CalPERS, more than 100 private markets participants, representing $8.7 trillion in assets, have committed to providing ESG data related to six sustainability metrics. The ESG Data Convergence Project has partnered with the Boston Consulting Group to produce an anonymised ESG benchmark.