ESG Data Convergence Initiative (EDCI)

Background

Private market investors have historically faced a fragmented ESG reporting landscape. General Partners (GPs) often receive multiple sustainability data requests from Limited Partners (LPs), while portfolio companies must respond to different reporting templates, definitions, and methodologies. This has increased reporting burdens and made it difficult to compare sustainability performance across investment portfolios.

The ESG Data Convergence Initiative (EDCI) was launched in September 2021 by a group of leading private equity firms and institutional investors to address this challenge. Rather than creating another ESG framework, the initiative draws on established standards—including GRI, TCFD and, where relevant, the EU Sustainable Finance Disclosure Regulation (SFDR)—to define a core set of comparable sustainability metrics for private markets.

Today, the initiative includes more than 500 General Partners (GPs) and Limited Partners (LPs) representing approximately US$60 trillion in assets under management across private equity, infrastructure, and private credit. Participating firms submit standardized sustainability data for portfolio companies, which is validated, anonymized, and aggregated into industry benchmarks managed by BCG Expand. The Institutional Limited Partners Association (ILPA) serves as Secretariat to the initiative's Steering Committee, while Boston Consulting Group (BCG) administers the programme.

Reporting and Participation Requirements

Participating General Partners are expected to:

• Track the EDCI's core sustainability metrics across participating portfolio companies.

• Collect data using the EDCI Metrics Guidance and standardized definitions where practicable.

• Submit anonymized portfolio company data annually, typically by 30 April.

• Share sustainability information with participating LPs using the EDCI reporting template where appropriate.

Limited Partners, meanwhile, are encouraged to align overlapping ESG data requests with the EDCI's standardized definitions to reduce duplication and improve consistency across the industry.

Current Status and Outlook

Since its launch, the EDCI has become one of the most widely adopted sustainability reporting initiatives for private markets. The initiative continues to refine its metrics annually through member working groups, surveys, and Steering Committee reviews, allowing the framework to evolve alongside regulatory developments and market expectations.

Although participation remains voluntary, the initiative is increasingly used as a common language for sustainability reporting between private market investors and portfolio companies. By harmonizing ESG data requests and creating industry benchmarks, the EDCI helps reduce reporting burdens while providing investors with more consistent, comparable sustainability information. It may also support firms' broader reporting processes under regulations such as the EU Sustainable Finance Disclosure Regulation (SFDR), although it is not itself a regulatory framework and does not guarantee compliance with any legal reporting requirement.

Resources

• https://www.esgdc.org/faqs/

• https://www.esgdc.org/metrics/#metrics-guidance

• https://www.esgdc.org/metrics/#guiding-principles