MSCI has launched a centralized hub allowing users to access the sustainability data and disclosures from private companies, working to drive transparency for investors in private markets.
The new hub, MSCI Private Company Data Connect, will reportedly help general partners streamline processes such as executing due diligence and risk management or responding to reporting requirements from clients and regulatory bodies. The hub may also aid in creating sustainable value-creation strategies, like engagement and target-setting for portfolio companies.
The platform allows companies to retain ownership of their self-reported data, giving them the option to approve or decline data requests from investors or partners directly on the site. It also incorporates software from Persefoni AI that may be used for carbon measurement and reporting, and users may access this tool for free through the data management site.
MSCI Private Company Data Connect uses a template developed by the ESG Integrated Disclosure Project, which aims to improve transparency between private credit lenders and syndicated loan markets.
“As companies’ sustainability and climate considerations are increasingly being used in capital allocation, lending, and other decision-making processes, investors need an efficient and effective way to share and analyze this critical data,” said Eric Moen, head of ESG at MSCI. “In recent years, there has been an uptick in global regulator and client demand for more reporting and data around the overall sustainability of GPs’ investments.”
Investors Increasingly Look to ESG Data in Decision-Making
As investors look to companies’ ESG scores and sustainability-related data, companies with better transparency and detailed reporting may gain a competitive advantage.
A number of ESG data-related platforms have been developed that allow investors to make side-by-side comparisons as they consider companies’ climate impact. And, as investors recognize the connection between sustainability commitments and long-term financial returns, companies may benefit substantially from improving ESG data transparency.
MSCI’s platform, in particular, aims to provide the same level of access to ESG data from private companies as is currently available from public companies.
“MSCI Private Company Data Connect is designed to give investors similar levels of insight into private companies’ sustainability practices with which they assess publicly traded corporations, underscoring MSCI’s deep commitment to enhancing transparency across the global private asset investment landscape and helping investors manage complex, total portfolios,” said Moen.