Novata Launches Framework to Support ESG Integrated Disclosure Project
These new metrics help promote greater harmonization and consistency of disclosure of key ESG indicators for borrowers in private credit and syndicated loan transactions
Novata, a public benefit corporation and technology platform that provides private markets stakeholders with intuitive and effective Environmental, Social and Governance (ESG) data management solutions, today announced the launch of in-platform metrics to enable financial market participants to collect the ESG information outlined under the ESG Integrated Disclosure Project (ESG IDP). The ESG IDP is a market initiative formed by industry organizations, credit asset managers and credit investors to encourage the use of a group of ESG metrics that lenders consider material. The goal of harmonizing and standardizing ESG information requests is to establish a global baseline of ESG information across credit markets.
Backed by a consortium that includes the Ford Foundation, S&P Global (NYSE: SPGI), Hamilton Lane (NASDAQ: HLNE) and Omidyar Network, and with the support of more than a dozen private equity firms and pension funds, Novata is the leading ESG data management platform built specifically for the private markets. The Novata platform provides customers with a clear on-ramp for selecting ESG metrics, painless data collection and data insights and analytics tools to inform investment decisions.
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ESG reporting by borrowers in the private credit and syndicated loan markets has not advanced quickly enough to effectively meet growing investor and regulatory demands. The ESG IDP was formed to establish a global baseline for ESG disclosure across the private and broadly syndicated credit markets. The ESG IDP is an industry initiative led by the Alternative Credit Council, Loan Syndications and Trading Association and United Nations-supported Principles for Responsible Investment that brings together leading lenders to improve market transparency and accountability.
“The ESG IDP is an important initiative to harmonize lender requests for ESG information and identify the ESG factors that are most material to lenders, in turn enabling consistent expectations for the borrower community,” said Lorraine Spradley Wilson, Chief Impact Officer and Head of ESG at Novata. “As the ESG data collection field advances, the Novata platform will adapt. Our rapid integration of the ESG IDP framework is a demonstration of our commitment to evolve quickly to meet changing customer needs.”
The ESG IDP module, housed in Novata’s framework builder, provides a simple and intuitive way for users to collect ESG information needed to fulfill their loan and credit reporting responsibilities. Novata’s framework builder is the proprietary in-platform tool used to create custom reporting frameworks that allow users to easily request ESG reports to each firm’s individual needs.
“ESG IDP represents an important step in addressing ESG disclosure challenges in the private credit markets,” said Michael Kashani, Head of ESG Credit at Apollo Global Management and ESG IDP Chair. “The harmonized template allows for data consistency, as well as broader market education on what the industry is looking for with respect to ESG disclosure. We are pleased that Novata was able to move so quickly to integrate the template in their platform so that firms can leverage this framework as they collect their ESG data.”
Since Novata’s successful platform launch in April, Novata has welcomed a range of private equity and credit firms to the General Partner Advisory Committee (GPAC) and has experienced significant global demand for its ESG data management platform.
“OHA is excited for the launch of the ESG IDP as a tool to promote ESG integrated analysis, engagement, and harmonize ESG data collection and reporting in broadly syndicated loan and private credit markets,” said Jeff Cohen, Managing Director, Head of ESG & Sustainability at Oak Hill Advisors and ESG IDP Vice Chair. “This is a big step for the industry – and great to see Novata has moved so swiftly to incorporate ESG IDP into their platform.”
To learn more about Novata’s platform offerings and to schedule a demo, please see here: https://www.novata.com/