Overview of the EDCI data collection & validation process
An important part of the EDCI data submission process is the data validation carried out by the BCG Expand team. While not a formal audit, the validation process includes a thorough external review of a GP’s submitted EDCI data, with Expand working collaboratively with the GP to improve the quality of the data. This helps improve the quality of sustainability data for the private markets over time, and gives all stakeholders confidence in the quality and validity of the data going into the EDCI benchmarks.
The validation process is an important element of the EDCI, with data needing to go through the validation process in order to be incorporated into the EDCI benchmarks.
Once GPs have gone through the data validation process, they will receive the following benefits:
- Be able to share their validated data with LPs and PCs in the EDCI data sharing tool
- Access the EDCI’s benchmarking capabilities and insights
- Receive a copy of the GP’s validated data submission template to use for external sharing as needed
We have listed below the different types of data checks being conducted with the bulk of the validation within the first 3 bullet points. GPs can see these checks in the validation tabs within the data submission template and review these before submitting.
The ‘Data Checks Glossary’ tab has info on all the validation checks carried out within the data submission template (if submitting via API with a participating tech platform, checks are also carried out in the API submission process).
Validation checks carried out by the EDCI team:
- Ensure company names and identifiers (for data submitted anonymously) are consistent across years
- Ensure data is internally consistent (e.g, # women on a board doesn’t exceed the total # of board members)
- Review of trending data, highlighting any changes in a company’s fundamentals and any large swings in metric KPIs to ensure they are driven by real world outcomes (vs. methodology changes)
- Compare a company’s data against an EDCI tailored benchmark (using regression analysis to create a like-for-like comparison) for each specific company and metric, enabling the BCG Expand team to highlight any significant differences
- Check to see if there are any close duplicates with other EDCI submissions, and highlighting if there might be potential discrepancies between multiple GPs’ submissions for the same portfolio company
- Check the methodology used for data collection and estimation is in line with data submission guidance and all data is in the correct units
Guiding Principles for determining our metrics
The ESG Data Convergence Initiative aligned on a set of guiding principles to inform the selection of the core metrics:
Globally accepted:
Selected from the most accepted and widely regarded frameworks; including GRI/WEF, SASB, and TCFD (and EU SFDR as formalized).
Meaningful:
From a financial or societal impact perspective; may be specific to a given industry.
Comparable:
Allowing performance comparisons between portfolio companies and GPs; adequate overlap exists across sectors.
Dynamic:
Evolving metrics as tracking improves and understanding and materiality evolves.
Straightforward:
Simple to track accurately, with limited total number of metrics to not overburden companies and ensure data quality and integrity.
Actionable:
Tied to specific actions under GPs and portfolio companies’ control.
Objective:
Metrics should minimize subjectivity or need for interpretation.
Our ESG categories and metrics
- Scope 1
- Scope 2
- Scope 3 (optional)
- Strategy
- Target
- Ambition
- % renewable energy usage
- % women on board
- % women in C-suite
- % underrepresented groups on board (optional based on region)
- Injuries
- Fatalities
- Days lost due to injury
- Net new hires (organic and total)
- Turnover
- Employee survey (yes/no)
- Employee survey response (optional)
- Employee sentiment and score (optional)