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How NorthEdge is investing in sustainability for the financial industry

NorthEdge has embraced Environmental, Social, and Governance (ESG) as a fundamental component in their approach both as investors and employers. We recently sat down with Dan Galley, Portfolio Business Partner at NorthEdge, to learn more about how sustainability has driven success in the business and across their portfolio.

NorthEdge is a regional private equity firm headquartered in Manchester, owned, and built by its senior team, and supported by a global blue chip investor base. The company backs entrepreneurial and ambitious management teams in their core sectors of technology, healthcare, business services, and specialised industrials, striving to create value and build better businesses across the UK regions.

Since their inception, NorthEdge has embraced Environmental, Social, and Governance (ESG) as a fundamental component in their approach both as investors and employers. We recently sat down with Dan Galley, Portfolio Business Partner at NorthEdge, to learn more about how their incorporation of sustainability within the business and wider portfolio has driven success.

Over the last ten years, the company’s approach to ESG has evolved as they continually take significant strides towards improving ESG performance in their own business and portfolio. Day to day, NorthEdge relies on a data-driven business model to help make informed decisions and ensure that every investment has a positive impact on their people, their portfolio, and the planet. The challenge they faced was to translate their financial data into carbon accounting to support the goals of their core ESG team and influence their portfolio companies to do the same.

As a member of The UN Principles for Responsible Investment (UNPRI), the BVCA’s Responsible Investment Advisory Group (RIAG) and signatory to the ESG Data Convergence Initiative (EDCI), NorthEdge both understand and champion the growing importance of ESG and its role in value creation. This, combined with facing regulations like the Task Force on Climate-Related Financial Disclosures (TCFD), the Sustainable Financial Disclosures Regulation (SFDDR), and The UK Sustainability Disclosure Requirements (UK SDR), created an urgency for the business to ingrain sustainability both internally and in their portfolio to remain ahead of any incoming legislation. 

The trigger to reach out to Positive Planet was a need for specialist advice to support the core NorthEdge ESG team in meeting their sustainability goals for the business. Positive Planet’s hands-on support helped demystify the translation between data collection and carbon accounting, enabling NorthEdge to gather a more well-rounded understanding of their impact.

In addition to this, Positive Planet also supported 17 of NorthEdge’s portfolio companies in applying the same processes and methodology for carbon measurement to maintain consistency. The continual guidance from Positive Planet has made tracking sustainability much more manageable. This project has continued into 2024, as the NorthEdge portfolio transitions to Year two of the process of NorthEdge championing external validation of carbon reporting and measurement.

Positive Planet also supported NorthEdge in their work towards achieving Carbon Literate Organisation Status from The Carbon Literacy Project. During the process, Positive Planet engaged all of their employees with training to learn more about the science behind climate change and the carbon impact of their activities. NorthEdge employees also pledged to take accountability for reducing carbon emissions generated from personal and business activities. Following the training and work towards achieving the accreditation, NorthEdge was awarded Gold Carbon Literate Organisation status, the world’s first private equity firm to have achieved this.

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“The team at Positive Planet has provided us with continued support in how we monitor our own carbon footprint and that of our portfolio companies. Their expertise in the space and ability to translate the complexities surrounding carbon accounting into real-life examples have helped us better understand our climate impact and how we can reduce it.

Their continued hands-on support has been a key driver in helping us release our Net Zero plan last year and support our portfolio to begin their own journeys towards the shared goal of achieving Net Zero.”

Dan Galley, Portfolio Business Partner, NorthEdge

The simplicity and hands-on approach from Positive Planet, along with its industry credibility gives NorthEdge peace of mind when it comes to sustainability. Throughout the process, the methodology is clearly laid out, validating all phases of work, and ensuring NorthEdge has a robust process for their carbon calculations, should they be subject to audit.

Positive Planet has been a key contributor in NorthEdge identifying the 42,149 tCO2e from its portfolio, a considerable amount of its organisational emissions. This has given NorthEdge a clear direction when setting up their own Net Zero strategy and subsequently supporting portfolio companies to take steps to build out their own plan and drive positive change across the wider industry.

NorthEdge employees now have the knowledge, training, and support to actively engage in climate conversations and drive carbon reduction across the business, their portfolio, and wider network. NorthEdge’s commitment to Carbon Literacy has been echoed by its Gold Carbon Literate Organisation status and has helped to propel a cultural shift that embeds sustainability within the company.

With a holistic understanding of their climate impact, plans are now in place to continue to drive decarbonisation. NorthEdge has set the target in their Net Zero plan for all their portfolio companies to take accountability and aim to decarbonise their own operations. Positive Planet will bring an additional three companies on board during 2024 to support this and continue to support those who have already begun their journey. 

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