What’s new for the EDCI 2025 reporting cycle

The ESG Data Convergence Initiative (EDCI) has quickly emerged as a primary framework for reporting sustainability metrics in the private markets. With nearly 500 general and limited partner participants representing $38 trillion in AUM and over 6,000 portfolio companies, investors have converged on EDCI’s guidance. The framework asks companies to report on metrics covering their greenhouse gas emissions, renewable energy and net zero plans, work-related accidents, hiring statistics, and more.

In preparation for the current cycle’s deadline in April 2025, the EDCI has updated its methodology and guidance. This post provides an overview of the essential changes GPs and firms should be aware of as they prepare to report.

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What is the EDCI?

The EDCI was born out of an industry desire for harmonization in understanding ESG performance in the private markets. As demands for disclosure of company ESG metrics has risen in recent years, portfolio companies frequently bore the brunt of numerous and repetitive data asks. In addition to compounding the time burden on companies, this proliferation made it difficult to assess the relative performance of companies compared to a standard set of benchmarks.

A group of industry participants formed the EDCI to catalyze a standardization of these various metrics and frameworks. The neutral initiative invites participating GPs to report on a uniform set of sustainability and other metrics in an annual reporting cycle, designed to align as far as possible with other frameworks. They also publish company-level benchmarks resulting from the submitted data.

The key ESG metrics the EDCI includes fall into the following broad categories

• Greenhouse Gas Emissions
• Net Zero
• Renewable Energy
• Diversity
• Work-Related Accidents
• Net New Hires
• Employee Engagement

Every year, the EDCI Steering Committee members review and update the guidance.

Changes to the EDCI for the 2025 reporting year

Infrastructure and private credit funds can now participate

The EDCI has expanded the asset classes relevant for disclosure beyond private equity with additional guidance clarifying how these investors can participate. For the 2025 reporting cycle, they have given the green light for infra and private credit investors. 

Accordingly, the guidance for several metrics has now been expanded to reflect this diversity of asset classes.

• Infra investors can specify the growth/operational stage of the asset, and additional examples speak to the complexity of classifying work-related injuries in infra assets.
• Private credit GPs should specify when data for a company is already included in the benchmark because sponsor-backed by another EDCI participating firm, to avoid duplication. Private credit GPs will have access to the benchmark data in the EDCI portal.
• For venture capital investors, EDCI encourages submission in line with the guidance for private equity GPs. But they specify that VCs should submit data “on a best-efforts basis,” recognizing the challenge of mature metrics programs at early-stage companies.

Updated guidance on energy and renewables reporting

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The EDCI will maintain its renewable energy reporting requirements in the 2025 cycle, and has added additional guidance to address ambiguity in prior cycles. Participants should note this updated guidance to avoid errors in reporting.

Participants must quantify the total energy consumption across operations as a normalized kilowatt hour metric. As before, this includes both acquired energy (Scope 2 – most commonly electricity) as well as fuels burned in company operations (Scope 1).

For calculating the portion of this energy that is renewable, EDCI adopts the GHG Protocol’s distinction between location-based and supplier-based reporting. Using the location-based approach, participants should use grid-average emission factors for the Scope 2 calculations as well as grid-average profiles on the renewable portion of the relevant electricity grids.

Using the supplier-based approach, companies should only factor in renewables contractual instruments the company has purchased, such as Renewable Energy Certificates (RECs). RECs represent an exclusive right to the renewable attributes of a certain quantity of energy purchased, and allow for a more precise understanding of a company’s renewable energy consumption. The EDCI encourages the supplier-based approach.

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New methods for measuring employee satisfaction and engagement

In the 2025 cycle, the EDCI has added optional metrics on employee satisfaction. Participants are invited to share whether they currently collect employee satisfaction scores – for example, an Employee Net Promoter Score (eNPS) or employee Satisfaction Index (ESI). If such systems are in place, participants can list the most recent scores.

The rationale given is that such metrics provide a more meaningful understanding of employee happiness and engagement and is more actionable for GPs than other employee engagement metrics.

For firms interested in starting such employee engagement surveys, a new appendix gives some simple examples of how to structure them.

New requirements around Net Zero metrics

The EDCI has transitioned its Net Zero metrics to “core,” whereas previously they were “optional.” Firms must specify whether each portfolio company or asset has a decarbonization strategy or plan in place (and if so, whether there is board oversight).

Additional detail is also required on companies’ and assets’ short-term (5-10 years) greenhouse gas emissions reduction targets as well as long-term targets. Firms should specify whether these targets are aligned to the Paris Agreement (most commonly, conforming to the latest guidance from the Science-Based Targets Initiative).

LGBTQ board diversity metric no longer included

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The EDCI has sunset the metric collecting the number of board members who identify as LGBTQ. This follows a two-year review cycle on the metric, during which time it was noted that the metric achieved a low submission rate, was flagged by many GPs as not “globally accepted or meaningful,” and that it is illegal to collect this metric in Europe and parts of Asia-Pacific. Consequently, the EDCI has removed it from the 2025 reporting cycle.

What’s the relationship between EDCI and mandatory/regulatory reporting?

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Corporate sustainability and ESG disclosure regulations are proliferating around the world, requiring a new degree of non-financial data transparency from companies. This includes private companies; Many of the most stringent disclosure rules, such as the EU’s CSRD and California’s CCDAA, require publicly traded as well as privately held firms to comply. Luckily, preparing for the EDCI submission this April is an excellent way to get a jumpstart on gathering the data that will no longer be optional for many portfolio companies and assets.

True to its stated aim to reduce the disclosure burden on companies, the EDCI is making an effort to align its metrics and guidance with other frameworks. For instance as in prior years, the guidance notes the specific entry within the “related frameworks” that each metric corresponds to. This includes reporting guidance from CDP, SASB, TCFD, GRI, and others.

In particular, the EDCI includes commentary on alignment between its framework and the EU’s Sustainable Finance Disclosures Regulation (SFDR). Many funds participating in the EDCI are also SFDR-applicable, meaning they need to separately report metrics including Principal Adverse Indicators (PAIs). Acknowledging this, the EDCI data submission template includes the SFDR template, allowing GPs to simultaneously report their SFDR PAIs.

That said, many disclosure requirements go beyond the EDCI framework, requiring more extensive disclosure and third-party assurance. Here are a few of the ways companies who fall under mandatory reporting frameworks may face additional requirements:

• Third-party assurance requirements. Many regulations require emissions data (among other things) to be verified by a third party. The standards for carbon accounting are quickly approaching those of financial accounting. Among other regulations, this applies to the CSRD and some companies reporting in line with the CCDAA.
• Additional metrics. Although the metrics required by the EDCI have significant overlap with other frameworks, they remain a subset of the universe of ESG metrics. Some standards go further. The CSRD, in particular, asks companies to consider a quite comprehensive list of items.
• Materiality assessments and transition plans. Some regulations now require companies to conduct an analysis of their sustainability policies and plans. The CSRD’s double materiality assessment is arguably the most rigorous, as it requires companies to develop perspective both on how sustainability matters affect the business and how the business affects the environment – and have it assured.

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How to prepare your portfolio companies and report on time

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Rolling out or improving a portfolio engagement strategy to prepare for submission to the EDCI can seem like a daunting task, but there are always ways of improving the process to make it more manageable – and valuable. Here are just a few best practices.

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1. Streamline data collection

This one sounds obvious – nobody wants to saddle portcos with a bean counting exercise, and GPs don’t want to sort through it in an inefficient manner. Luckily, the pace of technological development in this space is rapid, and it is worth checking to make sure you are leveraging the latest. As a general rule, if your portcos are spending time completing spreadsheet templates or manually reading utility bills and fuel invoices, there is likely room for them to take advantage of the latest technology to ease the data collection burden.

2. Future-proof audit and QA

To avoid costly rework down the road, best practice is to ensure that the data collection process is transparent and rigorous so you and your portcos can trust the results. For instance, anomaly detection and gap analysis can both speed the process and ensure completeness. Every emissions calculation should have clear and handy line of sight into source documentation and emission factors – core requirements of every audit. Clear and complete methodological documentation is essential.

3. Make everything reusable

GPs are drawn to participate in the EDCI, in part, out of a desire to streamline initiatives, so it goes without saying that efforts should be made to get the most bang for your buck out of data collection and engagement. For instance, much of the data required for the emissions portion of the submission doubles as rich data for understanding energy efficiency and other cost-saving, emissions-reduction activities.

4. Orient toward value

Deal teams and management are generally most receptive to ESG endeavors when there is a clear, tangible connection to value. Beyond long-term planning and potential marketing and sales benefits of prioritizing sustainability matters, the most value-creation links often lie in the realm of energy savings and efficiency. Fortunately, many emissions-reduction technologies are also cost-reducing – to the tune of $2T by 2030. Showing the connection here early on builds trust.

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How Gravity can help

Gravity has helped leading GPs and hundreds of portcos submit to the EDCI submissions. Firms switch to Gravity because we lower the data collection barrier and connect reporting to cost savings and energy efficiency project implementation wherever possible—all with world-class climate and policy expertise every step of the way.

Our pragmatic ESG, carbon management, reporting, and energy efficiency solutions enable any firm to get started with true bottoms-up engagement. 

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