Novata Metrics and Guidance
The metrics in the Novata platform align to widely accepted standards and frameworks, making it simple to identify a clear starting point for ESG reporting. The platform enables investors to establish an objective, quantifiable, and measurable baseline for comparison across portfolios and companies. As market expectations change and new regulatory requirements emerge, Novata’s Metric Library can quickly adapt to meet the needs of the private markets. Presently, Novata supports data collection against the following:
ESG Data Convergence Initiative (EDCI)
Sustainability Accounting Standards Board (SASB)
Global Reporting Initiative (GRI)
ESG Integrated Disclosure Project (IDP)
We adopt a user-friendly approach to metrics guidance, providing robust in-platform resources as well as in-house expertise to support the ESG journey.
GRI
SASB
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Reporting frameworks and standards are important tools that guide corporate actions around environmental, social, and governance (ESG) factors. Frameworks and standards can be complementary, but serve different functions.
ESG standards provide specific and detailed requirements around the tools or methodology for reporting. Examples of global reporting standards include the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB).
ESG frameworks provide direction more broadly, and focus on how information is structured and what data should be collected. Frameworks provide principles that guide the structure of ESG reporting. Some widely accepted frameworks include the Task Force on Climate-Related Financial Disclosure (TCFD), the Carbon Disclosure Project (CDP), or the UN’s Sustainable Development Goals (SDGs).
ESG frameworks and standards help companies understand, measure, and communicate their exposure to ESG risks and opportunities. They also promote transparency when engaging with stakeholders on material ESG topics.
ESG regulations are legal, compulsory sustainability reporting requirements put forth by regulatory bodies to bring attention to ESG factors in the financial industry. They are set by different regulatory authorities, including the European Commission (EU), Financial Conduct Authority (UK), and Securities and Exchange Commission (USA). Reporting requirements vary by jurisdiction and governing body. Some examples include the Sustainable Finance Disclosure Regulation (SFDR), Corporate Sustainability Reporting Directive (CSRD), and the upcoming SEC corporate climate-risk disclosures.
Private market investors use the Novata platform to streamline ESG data collection from their portfolio companies.
Environmental Metrics are related to resource and energy use, waste, and other physical environmental issues. Examining environmental metrics helps companies assess the risks and opportunities related to increasing costs and areas for cost savings, as well as potential areas for reputational damage.
Social Metrics include measures related to social concerns, such as customer privacy and worker rights and safety. Company disclosure on these metrics helps stakeholders gauge the contributions and potential areas of risk related to a company and its workers, consumers, and communities.
Governance Metrics are related to a company’s ethics, policies, and procedures. Common measures include board composition, transparency on management issues, and systemic risk management.
In the sections that follow, this guide shares the 15 metrics most requested by GPs in the Q4 2022 reporting period across the environmental, social, and governance dimensions. It also shares the top 10 metrics for each dimension for the same reporting period.
TCFD
UN SDGs
UN Global Compact
