A Six-Week Engagement Proposal
Prepared for Sarah Mitchell, COO
March 2026 · Confidential
OUR UNDERSTANDING OF YOUR NEEDS
Six weeks. Three questions. A working system at the end — not a report that goes in a folder.
HYPOTHESIS
Three portfolio companies, selected to test the system across three stages of the hold period and three sectors. Depth over breadth.
ESG work here has a deadline. Meridian's exit process gives us a concrete test: can we produce ESG positioning that buyer diligence teams will take seriously? This is where the system proves financial relevance.
The highest-emitting company in the portfolio. Manufacturing means real Scope 1 and 2 data — energy, process heat, fleet. This is where we prove that emissions reduction maps to cost savings, not just reporting compliance.
Build the architecture from scratch. Keystone is early enough that we're not retrofitting — we're designing the data collection and reporting system that this company will use for the life of the hold. The compounding thesis starts here.
APPROACH
Each step produces working deliverables. No step exists solely to set up the next one. Steps 1 and 2 run in parallel — we start building the system on day one.
Collect and structure climate data across three portfolio companies. Map what exists, identify what's missing, and build the data collection architecture that Northwood's portco teams will use going forward.
Build a working climate data platform in CC — a mini Watershed that Northwood owns, can query, and can evolve. Emissions calculations, portco dashboards, fund-level rollups, and full source data traceability. Co-built with a member of Sarah's team.
Model where each portco is headed on emissions, set science-aligned reduction targets, and build decarbonization pathways with top-down cost and savings estimates tied to portco financials. Roll up to fund level for LP reporting.
STEP 1
Weeks 1-2
Conduct structured discovery sessions with Sarah and each portco climate data contact. Map existing climate data sources — utility bills, energy invoices, fleet and fuel records, refrigerant logs, waste manifests — across Meridian, Sterling, and Keystone.
Assess data against GHG Protocol requirements for Scope 1 and Scope 2 inventories, and identify the data inputs needed for a Scope 3 category screening. Document what's measurable today, what requires estimation, and what requires new collection processes.
Review each portco's value creation plan and high-level financials (P&L and balance sheet) to understand how climate work connects to the investment thesis.
Our CC environment ingests and structures raw data files as we receive them — utility bills, spreadsheets, invoices. By the end of Week 2, your climate data is organized in a structured reference library, not scattered across email attachments and shared drives. This is the foundation the system compounds on.
STEP 2
Weeks 1-5 (continuous)
A working climate data platform in CC that calculates GHG emissions using GHG Protocol methodology and presents them through dashboards at the portco and fund level. Think of it as a mini Watershed or Enablon — not as polished, but functional, owned by Northwood, and built to grow.
The system takes the raw data collected in Step 1 — utility bills, fuel records, waste manifests — runs emissions calculations using published emission factors (EPA, IEA, DEFRA), and produces a GHG baseline for each portco and a fund-level rollup across Fund I and Fund II.
Scope 1 (direct emissions), Scope 2 (purchased energy), and Scope 3 (screening-level, identifying material categories) are all represented. Methodology and emission factors are documented within the system so quarterly updates use the same logic without needing us.
Every calculated number traces back to its source data and methodology, creating an audit trail for future verification or LP inquiries.
We start with a conceptual sketch in the first few days — a wireframe of the dashboard and data architecture for Sarah to react to. From there, we iterate as data flows in from Step 1 and refine the views throughout the engagement based on feedback.
A member of Sarah's team co-builds with us from day one. They're not observing a handoff — they're part of the build. When we leave, the person who helped construct the system is the person who maintains it.
We build in Northwood's CC environment, not ours. Climate data includes operational and financial inputs that should stay in your systems. When the engagement ends, the platform stays — fully functional, no migration, no export, no vendor dependency.
The system won't be perfect at the end of six weeks. It will be good, it will work, and it will be built so that Northwood can refine it — new dashboards, additional portcos, updated emission factors, layering in broader ESG metrics over time. The goal is a solid start that people are excited to grow from.
STEP 3
Weeks 3-6
A business-as-usual emissions model for each portco, projecting Scope 1 and 2 emissions to 2030 and 2050 based on growth assumptions from the value creation plan. The BAU answers the first question any stakeholder asks: where are we headed if we do nothing?
With baselines and BAU in place, we build the capability to set science-aligned interim (2030) and long-term (2050) reduction targets, guided by SBTi methodology. Northwood is not committing to formal SBTi validation — we use the framework as a credible reference point for target-setting that LPs and buyers will recognize.
We then model decarbonization pathways for Scope 1 and 2 emissions using top-down assumptions: the type of lever (fuel switching, electrification, energy efficiency, renewable procurement, fleet electrification), estimated capex and opex, projected savings, and emissions avoided. These are directional, not engineering-grade — but they're sized against each portco's financials so Northwood can evaluate them as investment decisions.
Where Scope 3 screening data from Step 2 is sufficient, we extend the BAU and target-setting to material Scope 3 categories. Where data quality doesn't support it, we flag those categories as future priorities the system can model when better data is available.
Everything is built into the climate data system from Step 2 — not a separate spreadsheet. When growth assumptions change or new data comes in, the model updates. Assumptions are parameterized so Sarah's team can run scenarios: different growth rates, different lever combinations, different timelines.
Decarbonization levers map directly to energy cost savings. The financial impact is material and measurable against EBITDA.
Energy costs are small relative to revenue, but a credible baseline, science-aligned target, and costed pathway is what buyer ESG diligence screens for.
At the earliest stage, the BAU model embeds climate planning into the operating model before costs are locked in.
INVESTMENT
Time & materials engagement with a projected range. T&M provides flexibility to go deeper where the data and opportunities warrant it.
Scope expansion to additional portcos beyond the three named, ongoing retainer work, third-party assurance or verification, or regulatory filing preparation. These can be scoped separately.
Travel: Two on-site visits to Chicago included. Additional travel billed at cost.
APPROACH
A PE-native climate program, built on Claude Code.
The program runs inside value creation plans, operating reviews, and LP reporting cycles. Deliverables are built for how PE firms actually operate — not adapted from corporate sustainability frameworks.
Every deliverable is built in Claude Code, lives in the Northwood environment, traces back to source data, and can be maintained and evolved by the internal team.
A Northwood team member builds alongside the program from day one. When the build finishes, the person who helped construct the system is the person who runs it.
A working system ships in weeks, not a strategy deck that requires a second phase. It won't be perfect — it will be good, functional, and built so the team is set up to grow it.
Northwood Climate Program · northwoodcapital.com