Full ESG integration on the horizon
ESG is becoming increasingly important for investors and fund managers in private equity. As part of a publication in Private Equity Wire in December 2020, AssetMetrix’ Head of Product Development, Moritz Haarmann and his colleague in Product Development, Hanne Dybesland were interviewed on the topic of ESG integration in private equity.
The article looks at the increased integration of ESG into the operational processes of limited and general partners and specifically the reasons for the heightened interest. In particular, the pressure from LPs demanding more transparency from their fund managers is mentioned. Despite the general compatibility of private equity and ESG, Haarmann and Dybesland see several challenges in the integration of ESG that investors and fund managers have to face. Much of this revolves around data: a large number of general partners are looking for solutions that can help with data collection, as well as understanding what data to request from portfolio companies and what metrics to include in regular reporting. In addition, Haarmann addresses the issue of standardisation and shares its expectations for the development in the market.
As winner of the “Best ESG Solution Provider” Award 2021 by Private Equity Wire, AssetMetrix supports private equity investors and fund managers with a holistic integration of ESG modules. The AssetMetrix system builds on existing data and enhances it from an ESG perspective with the help of frameworks and external data providers.
For general partners, the ESG Management module is based on current ESG requirements (including LP reporting, risk management, impact investing) and helps with digital workflows for data collection. For Limited Partners, the ESG Transparency Module provides support in identifying, managing and monitoring ESG risks and opportunities.