Creating Values: Behind the ESG Revolution in PE

Together with Private Equity Wire we hosted a virtual panel to discuss LPs’ concerns when it comes to ESG, how GPs can use ESG to create value and the view on third-party measurement & potential industry convergence around metrics.

During the webinar we looked at these topics from various angles, such as how important the article 8 and 9 categories are becoming under SFDR, LPs challenges to gain transparency and data necessary to assess and properly integrate ESG into the overall risk management process.

Key Notes:

  • New impact funds are being launched or raised at above USD 1bn in size to capture institutional LP allocations. What is the future for this space?
  • ESG reporting and risk assessment has been awash with competing standards and third-party providers – are GPs and LPs finally aligning themselves?
  • Why opportunities to invest through the energy transition are growing, and how GPs are using ESG as a lever to create value in other sectors too

Key Takeaways:

  • SFDR has a big role when it comes to standardization and how metrices should be calculated. This will bring more alignment and comparability on ESG data.
  • Data collection in ESG is still at the beginning and it will take some time until we will be able to use it to really understand and measure the effect on performance.
  • In order to build better data cubes going forward, data should be collected and managed in a digital, structured and clean manner.
  • Data capture and exchange is the main challenge today and automated workflows and digital solutions will play a major role here.
  • Stakeholders need to get started and create a structured process, implement workflows with or without the help of an outsourcing system/platform, but this will help them with their future reports.
  • At the moment less than 20% of European’s economy is taxonomy ready, not many asset managers can offer Art. 9 products (products with sustainable objective that are an anti-greenwashing regulation).
  • Today is essential to hire specialists for each sector and their level of expertise is critical.

For more information on ESG, read our articles on the subject:

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