IDP For All – Series Post 2

Series Prelude “Private Credit: The Last Domino for Sustainability Data”

As the private credit market continues to expand, investors (LPs and GPs) expect a higher standard of sustainability data disclosure; however, the current approach to data collection in private credit remains fragmented.

The publicly available IDP template is a standardized framework to support disclosure of key sustainability data, designed to ease administrative burden across disparate data requests, and inform sustainability measures as a lever for risk mitigation and value creation.

Series Post 2 of 3: “IDP for Sponsors”

Private equity sponsors and their portfolio companies often navigate sustainability information requests from multiple lenders, each with different reporting approaches and expectations. The IDP template helps to address this challenge by harmonizing lender requests around a standardized set of sustainability metrics across the private credit and syndicated loan markets. In doing so, the IDP creates efficiencies for lenders and borrowers while extending value to the sponsors that work closely with these businesses.

Private equity sponsors, for example, may come into contact with the template from the various lenders with whom they may share a portfolio company, or directly from the portfolio companies themselves. In either circumstance, the contents of a completed IDP template may enable a sponsor to better (1) oversee the sustainability posture of its portfolio, (2) align with other recognized/standardized frameworks in the industry, (3) fulfill its periodic sustainability reporting commitments (public or LP-facing), and (4) track and communicate – and sometimes reaffirm –operational insights and priorities identified during diligence and ongoing portfolio management.

Portfolio Visibility

IDP-aligned sustainability data can provide sponsors with a clearer, more harmonized view of sustainability performance across their portfolios. Where portfolio companies track and report such indicators using the standardized definitions and metrics embedded within the IDP template, sponsors may be better positioned to assess sustainability performance across their investments and identify trends that may otherwise be difficult to observe through disparate reporting processes.

Consistent data also allows sponsors to make better, cleaner performance comparisons, either between a company and its immediate peers within the portfolio, or against its own year-over-year performance. Ongoing performance information may provide additional context on the efficacy, direction, and pace of sustainability management efforts, while greater data consistency across portfolio companies may support benchmarking where appropriate. This utility may be particularly relevant for sponsors that are members of the EDCI, given the IDP template has been designed to align its question set with EDCI’s standardized portfolio company metrics. This alignment may also lessen incremental data collection needs by allowing sponsors and portfolio companies to leverage information already collected through existing EDCI reporting processes.

While sponsors typically identify material operational issues through existing diligence and portfolio monitoring processes, the consistent collection of IDP-aligned data can provide an additional input to support these efforts. In particular, the IDP template incorporates industry-specific sustainability factors that may be financially material, providing sponsors with another lens through which to track relevant risks and performance throughout the hold period. Any material changes in these sustainability indicators, such as employee turnover, greenhouse gas emissions, health and safety performance, or other operational metrics may provide useful signals when viewed against a portfolio company’s historical performance or, where appropriate, relevant portfolio or industry benchmarks.

Earlier identification of issues can provide sponsors and management teams with valuable time to understand underlying drivers and determine whether further attention or action is warranted. In this way, information collected through the IDP template not only fulfills lender reporting requests, but informs effective asset stewardship and ongoing portfolio company oversight by sponsors.

Operational Efficiency

By providing a consistent framework for lender sustainability requests, the IDP template can help portfolio companies understand what information is being requested, how relevant indicators are defined, and how that information should be presented.

Over time, establishing repeatable processes for fulfilling IDP requests may reduce the time and resources portfolio companies spend responding to disparate lender sustainability data requests. For sponsors, reducing the administrative toll can allow their portfolio companies’ management teams to dedicate greater attention to other operational priorities and remain responsive to capital provider sustainability expectations.

Consolidation and Consistency

Certain metrics embedded within the IDP template align with recognized sustainability initiatives, frameworks, and regulations (e.g., EDCI, SASB Standards, IFRS S1 and IFRS S2, SFDR). Where relevant information is already tracked by portfolio companies, sponsors that receive a completed IDP template may be able to leverage the contents to more efficiently fulfill high-priority disclosure workflows, such as investor due-diligence questionnaires, responsible investment reporting processes, and other regulatory and investor-driven data requests.

Greater consistency in this underlying information can reduce the need to reconcile differing definitions and formats across portfolio companies while supporting more reliable and efficient aggregation at the fund or portfolio level.

Exit Planning

Maintaining IDP-aligned sustainability information throughout the hold period may also support sponsors as they prepare their portfolio companies for an eventual exit. Year-over-year IDP-aligned data can help demonstrate how a company’s sustainability practices and performance have evolved under sponsor ownership. This may support the broader value creation narrative that a sponsor intends to showcase during a sale process.

Importantly, sustainability considerations can have a meaningful impact on transaction outcomes. Citing findings from its Global Private Equity Responsible Investment Survey, PwC reported in 2025 that one-third of private equity executives surveyed indicated that sustainability factors were a primary driver of value creation in more than half of their organizations’ recent deals. The findings further note that evaluating sustainability considerations during diligence can help inform purchase price and value creation planning, reinforcing the importance of proactively identifying, tracking, addressing, and/or highlighting relevant sustainability data prior to an exit.

The utility of this information may differ depending on the eventual exit pathway. In a sponsor-to-sponsor transaction, established data collection processes can provide continuity for the incoming sponsor and support future reporting and operational initiatives. For a strategic acquisition, organized sustainability information may facilitate cleaner integration into the buyer’s existing reporting and sustainability programs and, where relevant, provide information that can be incorporated into broader enterprise- or customer-level reporting. For portfolio companies pursuing a public listing, establishing robust sustainability data collection practices during private ownership may also help prepare the business for reporting and disclosure expectations applicable within the public markets.

More broadly, a company’s growth or change in ownership may bring additional sustainability disclosure requirements into scope, including through expansion into new markets or integration into a larger enterprise (e.g., California’s SB 253/261 and the EU’s Corporate Sustainability Reporting Directive (CSRD), where applicable). In these ways, the IDP template is supportive to the ongoing evolution in a business’s reporting and data collection interests.

Final Thoughts: Extending the Value of Sustainability Data

Although lenders and borrowers sit at the center of the IDP data collection process, the benefits of the IDP framework can extend throughout the broader private markets ecosystem. For sponsors, IDP-aligned sustainability information may provide greater portfolio visibility, support more efficient reporting, reduce administrative burdens for portfolio companies, enable earlier identification of emerging issues, and strengthen preparation for eventual exit processes.

By engaging with portfolio companies and supporting the collection and sharing of IDP-aligned sustainability data with lenders, sponsors can help establish more structured and repeatable data collection practices. In turn, sponsors can derive additional value from information already being requested by lenders while supporting more effective stewardship of their investments throughout the ownership lifecycle.

Co-authored in partnership with Malk Partners, the IDP’s premier thought leadership partner.