Private equity can further ESG progress

June 27, 2022 EcoVadis EN


In a positive step for the private equity industry and for investors, the US Securities and Exchange Commission (SEC) has released proposed rules that would require public companies to provide information on climate-related risks, including greenhouse gas emissions, on financial statements and in annual reports.


Winna Brown, EY Americas
Investors have acknowledged environmental, social and governance (ESG) matters as a competitive differentiator — from monitoring portfolio performance to investing in funds that focus on ESG principles. Indeed, the latter continued to soar in 2021. According to Bloomberg, global ESG assets are on track to exceed $53 trillion by 2025, representing more than a third of projected total assets under management, including funds managed by private equity firms as well as others.

ESG issues have been increasingly top of mind for many private equity (PE) firms, particularly with regard to environmental sustainability, and a number of firms are already using ESG to guide their investment decisions. The EY 2022 Global Private Equity Survey found that 39% of all private equity investors said they had invested in ESG-related products, up from 33% in 2021. The increase was even more pronounced among investors in smaller firms, those with assets of less than $2.5 billion, which rose from 7% in 2020 to 31% in 2021.

The survey also found that 42% of the largest PE fund managers say they consider ESG issues either seriously or very seriously when making investment decisions. In addition, 39% say they consider these issues seriously in certain risk areas. Yet in that same global survey, nearly half of the fund managers who responded said they were hesitant to launch ESG funds due to the concern that they may not provide the risk or return profiles that they believe investors are demanding.


Read the full article at: www.buyoutsinsider.com

Read more...

About the Author

EcoVadis EN

EcoVadis is a purpose-driven company whose mission is to provide the world's most trusted business sustainability ratings. Businesses of all sizes rely on EcoVadis’ expert intelligence and evidence-based ratings to manage risk and compliance, drive decarbonization, and improve the sustainability performance of their business and value chain. Its AI-powered risk mapping, actionable scorecards, benchmarks, carbon action tools, and insights guide a resilience and improvement journey for environmental, social and ethical practices across 200 industry categories and 175 countries.

Follow on Twitter Follow on Linkedin Visit Website More Content by EcoVadis EN
Previous Article
Why private equity can lead on sustainability
Why private equity can lead on sustainability

The private-equity business model puts general partners in a good position to help portfolio companies impr...

Next Article
KPMG - Digital procurement
KPMG - Digital procurement

EcoVadis's insight:In this new era where emerging procurement technologies are now plentiful, leading procu...