News & Analysis

Only 15% of firms have TCFD-aligned reporting, says report

The research also identifies the 10 best ESG performers, a list that includes Astorg, AnaCap and Partners Group.

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Less than a quarter of private markets firms listed in an ESG transparency index align their reporting with the guidelines set by the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD), according to a report from sustainability consultants ITPEnergised and Orbis Advisory.

In its second annual edition, the ESG Transparency: A Private Equity and Venture Capital Index found that many private equity and venture capital firms are moving slowly to adopt industry standards for ESG disclosures, according to a statement from the report’s authors.

The consultants assessed the efforts of nearly 300 firms on the implementation of ESG processes and management strategies. Firms included in the index manage between £200 million ($260 million; €240 million) and £50 billion in assets.

While it was “apparent” that many of the 155 private equity firms that were reviewed are making progress towards bolstering ESG disclosures, only one-third of firms have considered publicly reporting diversity and inclusion initiatives, the statement said.

Below are the index’s 10 best performers:

  1. Arcus Infrastructure Partners
  2. Partners Group
  3. Tikehau Capital
  4. NorthEdge
  5. Astorg
  6. AnaCap Financial Partners
  7. 3i
  8. Triton
  9. Earth Capital
  10. Three Hills Capital Partners

VC firms, included in the index for the first time, are moving even slower towards ESG adoption, the consultants found. However, a growing number of managers are beginning to view sustainability strategies as a performance enhancer that can add value to early-stage investments.

The index reported 11 venture firms with “equal top ranking” for criteria including public disclosure of ESG commitments, management processes, and in-house sustainability measures, as well as alignment with industry frameworks.

The top-performing venture firms are listed below:

  • Molten Ventures
  • Scottish Equity Partners
  • Balderton Capital
  • Lakestar
  • Vickers Venture Partners
  • Atomico
  • Oakley Capital
  • Cambridge Innovation Capital
  • Oxford University Innovation
  • Equinor Ventures
  • Frog Capital