Summa Equity uses Normative to drive portfolio decarbonization

Summa Equity is a private equity firm with a clear mission: investing to solve global challenges.

Since its inception in 2016, Summa Equity has been at the forefront of purpose-driven investing. Summa was the first private equity firm to align its own goals with the UN Sustainable Development Goals, and won the Private Equity Exchange & Awards’ “Best ESG Private Equity Initiative” in 2019, 2020, and 2021.

In addition, Summa works with Harvard Business School’s Impact-Weighted Accounts project, which aims to include ESG externalities in business accounting.

Summa Equity at a glance

• Sector: Private Equity
• Portfolio companies: 22
• Market position: Mid Cap

The challenge

When it comes to helping their portfolio companies with the E aspect of ESG (“Environmental, Social, and Governance”), Summa knows that the key to making an impact is to first understand the company’s current situation. After all, a company can’t manage what it doesn’t measure.

So in 2017, Summa went looking for a carbon accounting provider that could calculate its portfolio companies’ entire carbon footprints.

Especially important were the scope 3 indirect emissions, which include the emissions originating in a company’s supply chain. Since Summa’s portfolio contained several companies in the technology sector whose emissions were almost entirely in scope 3, they knew this would be the most vital scope to calculate.

After vetting several companies, Summa chose Normative’s carbon accounting engine for its comprehensiveness, its ease of use, and its ability to adapt to the various business models of Summa Equity’s portfolio companies.

The results

Normative’s decentralized data collection allowed Summa to aggregate its results, so the private equity firm could see and analyze the total carbon footprint of all its companies.

Standardized, comparable, and reporting-ready data

Meanwhile, Summa could still empower these companies’ individual carbon reduction pathways by providing the companies with breakdowns of their own specific carbon footprints.

These emissions calculations could be automatically shared in customized reports, allowing Summa to compare any portfolio company’s emissions with others in the portfolio or with companies in the same industry.

Redefining success for private equity

From the beginning, Summa has been working to prove that private equity can be profitable while still doing good.

“We want to demonstrate that impact and financial results can go hand-in-hand”, says ​​Hannah Berget, Impact Manager at Summa Equity.

With their three-part approach to generating positive environmental impact – target setting, climate action planning, and regulatory compliance – the forward-looking firm is setting a high standard for ESG in private equity.