Corecentra for Private Equity
A comprehensive, cloud-based platform for maximizing ESG & Impact across ALL phases of the deal lifecycle - from sourcing and screening, to due diligence, to value creation.
What is driving the urgency for ESG transparency in Private Markets?
Your Investors Are Now Serious About ESG
Limited Partners and Institutional Investors are now demanding visibility into the consolidated ESG performance of your portfolio. Importantly, though, it's not just about the Annual ESG Report that you may be cobbling together today (see graphic).
The investors want to know that your due diligence process is thoroughly vetting these companies from an ESG perspective. Once the vetted companies are acquired, they want to know that your firm is proactively driving continuous improvement in ESG impact as well as ongoing reduction in ESG risk.
The SEC Is Now Serious About ESG
The war on "greenwashing" has begun. The SEC has created an ESG Enforcement Division that is not only focused on disclosures from public companies, but is also ensuring that private equity funds classified and promoted as ESG-focused are, in fact, ESG-focused.
At the end of May, 2022, the SEC announced its first enforcement action against a prominent US financial institution as a result of false claims of ESG diligence for certain investment funds:
The Market Is Serious About ESG
Debates will continue to rage in both political and business arenas regarding the direct link between ESG performance and company performance. However, more studies are showing that whether the correlation is direct or indirect, companies with lower ESG risk profiles outperform the market both short and long term.
Companies that are good at managing ESG are often equally effective at managing all parts of their businesses. Further, strong commitment to ESG principles are an increasing factor in acquiring and retaining customers, as well as, acquiring and retaining top talent - both of which are critical to long term growth and profitability.
So Why Is This So Hard?
Lack of Standardized Metrics, Disparate Data, & Limited Visibility
Many private equity firms are stuck in a perpetual state of analysis, trying to figure out the answers to 4 fundamental questions:
- What exactly are we supposed to measure?
- How do we standardize metrics across the portfolio?
- Where and how will we get the data?
- Who in our firm has the time and expertise to do this?
In the meantime, your Limited Partners are growing more impatient and looking at alternatives for their next investment.
Manually Intensive Data Collection, Cleansing, & Consolidation
For those private equity firms that have moved past the analysis phase and are now trying to provide some transparency to their Limited Partners, the process is incredibly inefficient.
Multiple associates are following up continuously with portfolio companies to collect the data. Once they have the data, they must start the arduous process of manually consolidating that data into a single spreadsheet. Now, off to Powerpoint for hours of creating (and reworking) graphs and slides. And at the end of it all, a senior partner in the firm invariably wants to see the data differently - and the process begins again.
No Time To Interpret The Data & Proactively Drive Performance
Perhaps the biggest problem of all, though, is that after all of that manual work, virtually no time is left over for really understanding the results, and most importantly, proactively engaging with the portfolio to improve performance, lower risk, and create value.
The ultimate goal is not to simply generate an Annual Report. It's to incorporate meaningful ESG insight into every phase of the portfolio lifecycle - from sourcing & screening, to due diligence, to value creation.
There's a better way.
On Demand Impact Transparencytm
Redefining the way leading Private Equity Firms create value across the entire portfolio
Standardize, Simplify, Prescribe, Repeat
Corecentra's mission is to simplify and automate (where practical) the collection of ESG and sustainability data - not just once per year, but continuously.
Then, through an integrated ESG analytics engine, give the private equity firm the ability to gain meaningful insight at all stages of the deal lifecycle - not just once per year, but continuously.
Our ultimate goal is to enable the private equity firm to proactively engage with the portfolio, define prescriptive ESG cross-portfolio milestones, and then track progress in a centralized and standard way. And, you guessed it, not just once per year, but continuously.
We refer to this strategy as On Demand Impact Transparencytm.
Purpose-Built ESG Impact Management
Our founders at Corecentra - one of which worked in private equity for a number of years - saw a clear and urgent need for a purpose-built ESG sourcing, diligence, risk management, and value creation platform.
Our vision was to create a platform that dramatically accelerates time to value while decreasing the need for deep ESG expertise within the private equity firm. We are accomplishing those goals by continuously embedding the latest metrics and best practices within the platform. Additionally, we will continuously enhance our analytics and predictive algorithms to give the deepest, most actionable view of impact and risk.
Create Value at ALL Stages of the Deal Lifecycle
Ultimately, in addition to making the world a better place through effective ESG initiatives, we want to create significant incremental value during the hold.
In order to do that, leading private equity firms know that the process of creating value begins at sourcing and screening, extends through due diligence, and ultimately matures during the hold.
At Corecentra, we are committed to automating and optimizing ESG risk and impact at every stage of that lifecycle.
Accelerated Time to Value
Enabled through a purpose-built ESG software platform
Pre-Built, ESG Data Model
Proprietary, pre-defined ESG data elements, entities, and relationships to simplify and accelerate implementation and maintenance.
Industry Standard Frameworks & Best Practices
Embedded, industry-defined standards and best practices including policies, metrics, objectives, outputs, outcomes, formulas, and algorithms.
Impact Milestones & Portfolio Action Plans
Tools to proactively set goals and track progress, including a library of common milestones and supporting action plans.
AI-Driven ESG Analytics
Automated reports and alerts, ESG-specific data visualization with pre-built dashboards, algorithmic insights, and predictive modeling.
Enterprise Integration & Automation
Standard API with pre-built integrations to common deal management systems, 3rd party data providers, and portfolio company operational systems.
Secure, role-based visibility for key stakeholders, including portfolio companies, deal management teams, investment committees, and limited partners.
Want to learn more about Corecentra?
Just click the button to schedule a call to discuss your current ESG management process and see a quick demo!