Case study: Summa Equity
The ESG award-winning private equity firm guides its portfolio toward climate action using Normative’s carbon accounting.
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
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 measure their portfolio companies’ entire carbon footprints.
“Other carbon accounting companies couldn’t measure scope 3”
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 measure.
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.
“Normative provides comprehensive carbon calculations that are easy for our portfolio companies to understand.”
Hannah Berget, ESG Associate at Summa Equity
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.
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Highlighted Summa portfolio company: Norsk Gjenvinning Group
The Norsk Gjenvinning Group (NG) is a key player in the transition to an efficient circular economy and Norway’s largest provider of recycling and environmental services, managing over 25% of all waste in Norway. NG has been a part of the Summa Equity portfolio since 2018.
In 2020, they avoided 576,984 tons of CO2 emissions – an improvement of 16% from 2019 – and were named “Green Company of the Year” by the City of Oslo.
Beginning in 2018, NG measured their emissions using a consulting tool specializing in Norway’s waste management industry. NG’s reporting only included Scope 1 and Scope 2 emissions – until Summa Equity provided Normative to its portfolio companies, and NG could calculate its full supply chain footprint and report scope 3 emissions for the first time.
“Getting numbers gives us a better foundation for making plans”
From the start of the process, NG knew that it would be quite difficult to collect high-quality, standardized data from their many suppliers.
The Greenhouse Gas Protocol (GHGP) recommends that companies do a preliminary Scope 3 measurement using spend-based data, then use this estimate to guide them as they refine the measurement with supplier-specific data.
Following this strategy, NG did their first Scope 3 calculation using a spend-based method that drew from Normative’s 200 million supplier data points.
They found what they’d expected: like the majority of businesses, the biggest share of their carbon footprint came from indirect and supply chain emissions in Scope 3. In particular, NG noticed that their diesel vehicle fleet was a large source of emissions.
Going forward, NG will use their Scope 3 measurements to inform their carbon reduction actions – like exploring lower-CO2 options for their fleet – while refining these calculations with activity-based data from their suppliers.
“Numbers and analysis are an important foundation for ambitious – but also realistic – targeting and direction-setting.”
Ingrid Bjørdal, Director of Sustainability and Compliance at Norsk Gjenvinning
Summa is 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, ESG Associate 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.
“We’re collaborating with Normative to find solutions that have real impact as we push our portfolio companies to be better on every aspect of ESG, including carbon accounting and reduction.”
Hannah Berget, ESG Associate at Summa Equity
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