ESG Management Tool Development and Uses

Development of the Tool

The Tool was developed in collaboration with Irbaris, a strategy consulting firm focused on environmental issues. The definitions within the framework (and the tool itself) reflect the leading thinking on ESG management and are informed by:

• EDF’s experience partnering with prominent private equity firms including KKR, Carlyle Group and Oak Hill Capital Partners. These partnerships have resulted in $370M in operating cost savings and a reduction of 820,000 metric tons of CO2 emissions at more than 30 portfolio companies.
• Research and publications by the British Venture Capital Association, BSR, Doughty Hanson, Irbaris, Malk Sustainability Partners, PwC, Private Equity International, the United Nations Principles for Responsible investment, and World Wildlife Fund.
• Detailed peer review and feedback from a broad range of stakeholders including Actis, Blackstone, Bloomberg, BSR, Carlyle Group, Doughty Hanson, KKR, PwC US, TPG, and 4 large global LPs.

Uses of the Tool's results

The outputs from the tool can be used in several ways by general partners (GPs), limited partners (LPs), and others, for example:

1. GPs can use the Tool to evaluate their performance and develop a prioritized action plan for improvement


2. LPs can ask GPs to perform a self-assessment and discuss with them the actions the firm plans to take based on the results


3. Consultants can utilize the Tool to develop specific recommendations for improvement with their private equity clients

EDF’s ESG Management Tool is a resource for private equity firms to make measuring and managing ESG performance a standard practice for value creation across their funds.

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