We are quite proactive. There is a lot more flexibility on the private market side. So, for example, when we invest in a private equity, venture capital or private debt funds, we encourage GPs to create investor advisory boards. We take a seat on those, which gives us a voice to speak about impact and to challenge those GPs as they start to think about how they want to report on ESG or the impact their portfolio companies are making. It is effective, it works. We have seen this with a private equity manager we invested in two years ago. Earlier this year they launched their first impact report with detailed, granular information about the E, the S and the G aspects of their eight to 10 portfolio companies. That for me is suc- cess and achievement.


PI: Kate, data is improving, but is it good enough yet? Brett: It has taken huge steps forward, but there is still a long way to go. Exponentially, the data is coming faster and is much better, but it is not being consistently reported or presented in a compa- rable manner. We are seeing a lot of progress through regulation, but also through asset owners pushing managers and telling them what kind of data they want to see. We have, in one of our sustainable opportunity funds, worked with private market managers and asked what key metrics they look for when choosing to invest in a company or not and if they can report on those metrics. It has taken several years of going back and forth to understand what the client wants to see and what is useful to


both sides. When you start having those conversations with man- agers they are generally happy to oblige. We will continue to see a strong increase in the level of data com- ing through. What I would caution though is that you do not want data for the sake of having data. We have seen huge reams of data sent to clients and they do not know where to start or what to pick out of it.


There is an opportunity for managers and asset owners to think about what the underlying pension members want to see. The fact that it is ESG data is not necessarily helpful to the underlying members.


PI: Are companies releasing enough quality data about their operations? Barrie: In the private markets it is worth noting that data is used in slightly different ways than it is in public markets. Firstly, there is blind pool risk, which is when committing to a fund you do not know what companies you will be holding. That is coupled with limited secondary opportunities. If you want to sell a company that your GP has bought the options are limited and it’s relatively costly. So, there are limits to what you can do with the data once you have committed to a fund, so we rely heavily on our relationship with the asset managers. Joining investor advisory boards is a helpful way of maintaining that relationship and providing meaningful input. We are not just investing money with a private equity man-


Being a passive investor should not mean that you are passive on stewardship. Stephen Barrie, The Church of England Pensions Board


14 May 2020 portfolio institutional roundtable: ESG


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