Invest Europe opens its ESG Reporting Guidelines

• European Investment Fund, AP2, France Invest endorse guidance

Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, is making its ESG Reporting Guidelines available to the entire private equity and venture capital community – previously only available to members – giving all firms best practice guidelines for reporting ESG aspects and metrics, policies and practices, enabling long-term investors to access sustainability information on their investments.

• Invest Europe’s ESG Reporting Guidelines comprise a revised template for reporting to limited partners, including a list of recommended ESG metrics in line with regulatory requirements, voluntary initiatives, and investors’ needs. The Guidelines include direction for firms on integrating ESG into reporting processes throughout the investment lifecycle, and information on developing an ESG policy and assessing materiality. They also contain an extensive mapping of the pan-European regulatory environment, as well as existing standards and frameworks.
• The Guidelines have already received broad industry recognition, with endorsement by the EIF, AP2 and France Invest. A range of general partners have already started using the template as their preferred format for sustainability reporting.

Invest Europe created the ESG Reporting Guidelines in 2022 with the support of more than 50 industry and ESG experts from Europe and beyond, initially making the template and guidance available to Invest Europe members to gather experiences and feedback. The aim of extending the Guidelines and template to the entire industry is to strengthen and accelerate momentum towards codification and harmonisation of ESG reporting, making the process easier for GPs, and the data more comparable and scalable for LPs.

The broad availability of the industry-leading Guidelines comes as the climate crisis reaches unprecedented levels, leaving no sector of activity unaffected and increasing pressure on businesses to step up efforts to tackle carbon emissions. Other topics, such as the participation of women in key roles and diversity in the workforce, are also generating attention from long-term investors and the public at large, driving greater action by private equity and venture capital firms.

Eric de Montgolfier, CEO of Invest Europe, commented:

• “ESG and the climate crisis are among the biggest and most complex issues facing the industry today. Our ESG Reporting Guidelines provide much-needed clarity and practical guidance on incorporating and reporting on essential ESG topics. By extending availability of the Guidelines, we aim to increase harmonisation across the industry and create a new benchmark for ESG reporting, helping the industry to participate fully in the drive to a more sustainable future.”

When reporting according to recommended metrics, fund managers can leverage Invest Europe’s logo to signal that reporting is in line with industry norms. The revised ESG reporting template also includes additional metrics for those firms that wish to go further in their reporting to satisfy voluntary standards, investor demands, or to expand ESG data coverage.

Leading institutions, investors, fund managers, national associations and ESG solutions providers have given their support to the new Guidelines, paving the way for widespread adoption across the industry.

Marjut Falkstedt, Chief Executive Officer, European Investment Fund, commented:

• “Tracking the performance of our investments is important for us. At the EIF, we want to contribute to the overall efforts of generating understandable and comparable metrics, so that ESG considerations can be leveraged towards achieving the policy goals of a more sustainable and inclusive Europe. We’re pleased about Invest Europe’s initiative for this ESG reporting template, helping to pave the way for a harmonised approach across the European venture capital and private equity industry.”

Anders Strömblad, Head of Alternative Investments, Andra AP-fonden/AP2, added:

• “This guidance and the reporting template constitute a big leap forward for the entire private equity industry. Consolidation and harmonisation of reporting on ESG will save time and resources and – more importantly – facilitate data-driven ESG decisions for both GPs and LPs. By also securing coherence with international initiatives, the Invest Europe guidance and template also forms the most solid steppingstone for global consistency in ESG reporting.”    

Alexis Dupont, Managing Director, France Invest, said:

• “Embracing sustainable investment and addressing climate change informed France Invest’s national pioneering work on ESG reporting harmonisation. A common approach at the EU-level is required, with Invest Europe’s ESG Reporting Guidelines now setting a new global ‘gold standard’ for ESG reporting to investors. France Invest is delighted to support the initiative, and promote these Invest Europe guidelines in France.”

The ESG Reporting Guidelines are part of an extensive library of ESG and sustainable investing resources created by Invest Europe to help managers and investors to understand and navigate this crucial topic. They include our Guide to ESG Due Diligence for Private Equity GPs and their Portfolio Companies, our Climate Change Guide, and the ESG KPI Report which tracks industry efforts across a range of ESG topics.