ESG Data Convergence Initiative (EDCI)

The ESG Data Convergence Initiative (EDCI) is a global initiative that seeks to unify and standardize the collection and reporting of ESG (Environmental, Social, and Governance) data in the private equity sector.

Launched in 2021, this platform aims to enhance the comparability of ESG data across companies and funds, promoting greater transparency and efficiency in sustainable investments.

Origin and Objectives of the Initiative

The EDCI was initially driven by the Bureau of Asset Management of the NYC Retirement System and several leading private equity firms. Its purpose is to provide a common framework to:

• Reduce fragmentation in ESG data reporting.
• Improve the quality and consistency of ESG information.
• Facilitate informed decision-making by institutional investors.

Standardized ESG Indicators

The initiative proposes a core set of indicators that portfolio companies are required to report, including:

• Greenhouse gas (GHG) emissions.
• Renewable energy consumption.
• Gender diversity on the board of directors.
• Workplace accidents.
• Employee turnover.
• Governance and ethics policies.

Impact on the Financial Sector

The EDCI helps improve the integration of ESG factors into financial risk and opportunity assessments, aligning with the expectations of both investors and regulators. As more firms adopt this framework, comparability across portfolios increases and commitment to sustainability strengthens.

Participation and Growth

Since its creation, the ESG Data Convergence Initiative has experienced rapid growth, with more than 300 private equity managers and funds joining the initiative. This represents trillions of dollars in assets under management, making the EDCI one of the most significant collaborative efforts on ESG data globally.

Relationship with Other ESG Standards and Frameworks

The EDCI complements other reporting initiatives such as:

• GRI Standards (Global Reporting Initiative)
• SASB Standards (now part of the ISSB)
• Task Force on Climate-related Financial Disclosures (TCFD)
• SFDR and CSRD in the European Union

By aligning ESG data from the private sector with these frameworks, the EDCI promotes greater regulatory coherence and accelerates the transition toward a sustainable economy.