ESG has been a topic of interest for private market participants for a while. We are currently seeing an increasing need for LPs and GPs to understand better and develop in more detail their own understanding of ESG. Whilst this was an area mostly only touched upon in a generic way and to a lesser degree driving investment decisions, stricter regulations are now seeing investors and managers having to dive more deeply into building ESG data and metrics into their strategies and portfolios.
Having recently been awarded as “Best ESG solution provider” by Private Equity Wire readership, AssetMetrix has taken the opportunity to host a webinar on “An accelerating ESG imperative for Private Equity?” in cooperation with IPEM. In this webinar, we look at
- How the pandemic accelerated the ESG agenda for institutional investors
- The expected impact of EU ESG disclosure regulations, taxonomy & trends in other jurisdictions
- ESG as a value creation tool / how sustainable businesses proved more resilient in this crisis
- How well is private equity addressing climate issues / bringing solutions at a portfolio level?
- Will the “S” part become the priority? How are allocators seeing the growing social challenges?
Our panelists Maria Carradice, Mayfair Equity Partners and Philippe Dutertre, AG2R La Mondiale, together with our moderator Moritz Haarmann, AssetMetrix, discuss how to embrace this rapid shift for Private Equity and the many challenges and opportunities lying ahead.
ESG means a lot of things to different stakeholders – Mayfair looks at this from two perspectives: How can they as a fund manager influence portfolio companies and what can they do in terms of ESG as a company. Signing up for UN PRI and developing an ESG roadmap for themselves and their portfolio companies are just the starting points. The UK based fund manager has started focusing on ESG some time ago, being specifically asked to tackle this by cornerstone investors. They have taken this as an opportunity to embed ESG in their business from the start.
AG2R La Mondiale has started their ESG journey a long time ago, having extended their scope of ESG integration to various strategies including private equity and private debt. The group has joined both French and international initiatives and now manage their own EUR 10bn portfolio with strict SRI filters, already publishing several reports and measuring KPIs accordingly. They make it clear to all managers they invest in through their annual ESG questionnaires that they are not simply looking for returns but sustainability.
Both companies agree that making ESG a topic every team member is responsible for leads to a sustainable way of thinking and acting, being able to make incremental improvements each year.
Collecting data on ESG is one of the main challenges and has developed from collecting (less quantitative) answers to very generic questions to finding solutions to collecting data which are repeatable in portfolio companies. The key is to enable GPs to respond to LPs in a timely manner, whilst being compliant with regulations. It was the general consensus that this area needs more work, including introducing standards, whilst staying relevant for the various businesses Private Equity investments cover. The clear message of this panel: Europe needs to get regulation clear and understandable, find ways to collect meaningful data, report accordingly and act as a leader for other regions.
To listen to the thoughts of our panelists sign up for the recording of the panel: Request recording!
To find out more about how AssetMetrix can help you drive your ESG journey, contact our team for a meeting: Arrange a meeting!