ESG | March 3, 2023

ImpactAlpha Deal Spotlight: ESG in private markets

Roodgally Senatus
ImpactAlpha Editor

Roodgally Senatus

ImpactAlpha, March 3 — Limited partners in venture capital and private equity funds are deemphasizing ESG considerations, according to a survey by Adams Street Partners. One reason: the difficulty of backing up ESG claims with clear evidence and reporting.

New York-based ESG data and benchmarking platform Novata raised $30 million in Series B financing this week to streamline ESG measurement and benchmarking for private companies and private-markets investors. “As our industry continues to grow, we all face increasing expectations from investors, regulators and the broader society to ensure that strong investment performance is delivered alongside responsible business practices,” said Erik Hirsch of Hamilton Lane, which led the latest round. 

Impact management

Early backers of Novata, including the Ford Foundation and S&P Global, also reupped in the round. Other investors include Microsoft’s Climate Innovation Fund, as well as partners and managing directors from private equity firms including Clearlake Capital, Hellman & Friedman and The Vistria Group. The Vistria Group’s Mona Sutphen joined Novata’s board of directors last month.


The range of investors “underscores how major facets of global economic activity are coming together to address our most critical common challenges,” said Novata’s Alex Friedman. He said Novata has contracts with more than 3,500 private-market clients. Novata in November launched benchmarking tools to help clients compare key non-financial data against public and private market industry averages.

Market forecast

Global ESG assets are on pace to exceed $53 trillion by 2025, which would represent more than one-third of assets under management. New York-based BlueMark raised $3.8 million early last year for impact verification and assessment from investors, including the Ford and Rockefeller foundations. Morningstar acquired ESG research firm Sustainalytics in 2020.