Novata has launched as a new public benefit corporation and technology platform seeking to provide the private markets ecosystem, including private equity firms, with intuitive and effective environmental, social good and corporate governance (ESG) measurement, data collection and benchmarking. Backed by a consortium, which includes the Ford Foundation, S&P Global (NYSE: SPGI), Hamilton Lane (NASDAQ: HLNE) and Omidyar Network, Novata has created an independent open architecture platform for the private markets to more consistently report on relevant ESG data.
“The majority of the world’s economic activity is driven by private companies. It is their approach to environmental and social impact which will ultimately accelerate the ideals of inclusive capitalism,” said Alex Friedman, chief executive officer of Novata. “Our solution is unprecedented because it marks the first time that a group of non-profit and for-profit leaders in social justice, financial data and the private markets have joined forces to solve for the ESG fragmentation that has plagued the public markets.”
Lorraine Spradley Wilson, chief impact officer and head of methodology at Novata, added, “With a simple and effective methodology, a secure technology-enabled data repository and unbiased
“At the Ford Foundation, we are committed to supporting initiatives that enable meaningful progress toward a more inclusive form of capitalism,” said Darren Walker, president of the Ford Foundation. “Novata’s solutions give investors the ability to better allocate capital with more effective consideration of purpose, inclusiveness and sustainability. Their tools will be an essential part of creating an economy that works for all.”
“The global economic transition to net zero will be realized through a truly collaborative and aligned approach across both the public and private markets,” said S&P Global CEO Doug Peterson. “S&P Global is proud to be investing in much-needed innovation in ESG transparency and benchmarking in the private markets through the creation of Novata. S&P Global powers the markets of the future, and the private markets represent an area where we can help add transparency and evidence to support their workflows. This investment represents a step forward in working with the private equity industry with a purpose-built solution that supports ESG disclosure for the private markets.”
“Across the private markets, ESG is a complex problem that requires nuance to solve—it’s not one-size-fits-all,” said Erik Hirsch, vice chairman and head of strategic initiatives at Hamilton Lane. “Novata is a neutral solution that allows private companies, including general partners, to collect and measure their data based on whatever metrics are most meaningful for them and their investors. At Hamilton Lane, we believe that best-in-class data and technology solutions will continue to drive the private markets forward, and we are excited to launch Novata alongside such an esteemed management team.”
“Private companies and their investors are a growing part of our economy and have a critical role to play in contributing to a more inclusive and sustainable capitalism. We believe Novata provides a solution that will enable private companies, general partners and limited partners to better manage their impact on people and the planet,” said Mike Kubzansky, CEO at Omidyar Network.
A range of leading private equity firms serve as advisors to the Novata consortium, including Bridgepoint, Clearlake Capital Group, Kohlberg & Co., KPS Capital Partners, Lindsay Goldberg, Summa Equity, Thomas H. Lee Partners and The Vistria Group. Additionally, several of Novata’s general partner advisors—The Vistria Group, Clearlake Capital Group and Kohlberg & Co.—have made investments in support of Novata, with all proceeds from such investments to be donated to nonprofits.
“We’ve experienced firsthand the critical need for a more integrated approach to measuring ESG, as well as the challenges that arise without a framework and appropriate tools tailor-made to meet the unique needs of private equity sponsors,” said José E. Feliciano, co-founder and managing partner of Clearlake Capital Group and the Clearlake Impact Initiative. “We are committed to the tenets of responsible investing and believe the private markets have a responsibility to better manage and track ESG performance to not only generate strong investment returns, but to also make a positive impact on society and its future.”