Bayerische Versorgungskammer (BVK), Germany’s largest pension fund with €107bn in assets under management, has joined the private markets ESG Data Convergence Initiative (EDCI), it announced today.
BVK, which is the umbrella institution for 12 pension schemes, has decided to join EDCI to better assess its private equity portfolio through ESG data, said Kathrin Kalau-Reus, head of private equity, infrastructure and timber.
She added: “It is crucial that managers and investors work together through this initiative to agree on ESG matters in order to achieve a common standard for reporting. Consolidating the strengths of over 350 EDCI members makes it possible to drive the topic of ESG metrics in alternative asset classes forward in a lasting and sustainable way.”
The German scheme invests €12bn in private equity in well established markets in North America and Europe, but it also expands its holdings to Asia, it said, committing to single funds in large/mega markets and working with fund of funds partners in small and mid markets.
EDCI, which was spearheaded by CalPERS and Carlyle to fill the ESG data and benchmark gap for private equity investments, now counts 375 general partners (GPs) and limited partners (LPs) representing over $28trn in assets under management, and 4,300 portfolio companies included in the benchmark.
Investors, including pension funds, have long lamented the lack of ESG data for private market investments compared with public markets, but acknowledging that private equity stakes in companies allow them to exercise more and direct pressure on the boards of invested companies.
The Initiative siad metrics such as greenhouse gas emissions, renewable energy and diversity would help investors assess their ESG progress.
EDCI is also open to private credit firms, investment consultants, and ESG data platforms, planning to add a new net zero metric next year, it said.
BVK has consistently expanded its sustainability investment strategy, being the first pension institution in Germany to join the Net Zero Asset Owner Alliance (NZAOA), through the Global Real Estate Sustainability Benchmark (GRESB), and signing the UN Principles for Responsible Investment (PRI).