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Palladium Equity Partners is one of very few non-impact U.S. private equity firms to achieve B-Corp certification, meeting rigorous standards of transparency and responsible business practices. In 2022, Palladium Equity Partners engaged with Green Project to tackle carbon accounting and track emissions across their portfolio investments. 

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We spoke with Carlos Reyes, the Managing Director, Head of Sustainability at Palladium Equity Partners about sustainability reporting and his experience with Green Project. Listen to the full conversation here. 

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Sustainability is a tool for value creation

“Our LPs not only care about maximizing the returns on the capital they have entrusted us with, they also care about the manner in which we do it,” Carlos said. “That’s where sustainability comes into the equation. Sustainability for us is a tool for value creation, so we embed sustainability across all our investment practices.” 

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Palladium Equity Partners has committed to report into the ESG Data Convergence Initiative (EDCI), the leading voluntary framework to standardize ESG disclosure across private equity and venture capital firms; EDCI is a tool for comparative benchmarking, investor data sharing, and sustained industry improvement.

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Reporting isn’t always straightforward

Green Project is proud to be an integrated data solutions provider for EDCI and bring forward an end-to-end solution for EDCI reporting needs. Reporting isn’t always straightforward, and Green Project makes the process automated and auditable so customers can focus on what matters: driving continual climate performance improvement.

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Carlos shared roadblocks he’s previously come across with data collection: “The key challenge is often that perfection is the enemy of good. You send a data request to the portfolio companies and they feel that they have to get all the data in perfect shape — and sometimes, for instance when you’re talking about Scope 3, it unfortunately may have to be an approximation.”

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“It’s also a matter of definitions. You might interpret the basic indicators of EDCI differently. It’s a constant improvement. Next year, the data will be better. You’re not going to get it right on day one, and that shouldn’t scare anyone. It’s about thinking long term: there is a path to improvement. You have to think about it that way.”  

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Technology saves precious time

“Your most precious commodity is time, and being able to collect data in an automatic manner, in a transparent and quantitative manner, that saves us time. With data, you take a statement and you convert it into evidence. A statement without evidence is just an opinion, and everyone has an opinion.” 

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“Working with technology has allowed us to save time. With Green Project, some of the utility systems of our portfolio companies — like gas and power consumption — can be engaged with in an automatic manner which lets us have a near-real-time idea of consumption levels. Based on that data, we can work jointly with our portfolio companies to make improvements.” 

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An additional boon of software-first carbon accounting is the ability to streamline companies’ audit controls. While EDCI doesn’t require third-party assurance, many new regulations, including California’s groundbreaking corporate GHG disclosure legislation, have put in place stringent data validation and assurance processes. Leveraging carbon accounting technology lets you be audit-ready with ease so you don’t have to stress when the time comes to validate your findings. 

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Green Project is a partner, not a provider

Why did Palladium Equity Partners choose to work with Green Project for their carbon accounting needs?

“There was a kinship between what you do and how we see sustainability,” said Carlos. “Other service providers might also be able to give you the tools to measure and assess, but for us it was always about making improvements. Green Project sees the data day in and day out; you have the benefit of understanding the market and being able to connect the dots and offer suggestions on how to make those improvements.”

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“Some of the interactions we have with Green Project, in terms of recommending different ways we could manage our emissions, are quite valuable, and that is ultimately the reason we decided to go with Green Project versus all the other platforms.”

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“At the end of the day, collecting data is just one piece of the puzzle, but the piece that creates the greatest amount of value for our investors and stakeholders is the improvement piece.” 

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“Working in partnership with Green Project around improvement has tremendously benefited us and helped us move our agenda forward.” 

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Check out Palladium Equity Partners and schedule a call to learn more about Green Project. 

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