Environmental, social & governance are three central factors in measuring sustainability and ethical impact within a company.

Private equity investing is especially suited for taking ESG factors into account due to its long-term investment horizon and often active ownership role.

Being a PRI Service Provider Signatory AssetMetrix uses and incorporates where possible their definition: The PRI (Principles for Responsible Investment) defines responsible investment as a strategy and practice to incorporate environmental, social and governance (ESG) factors in investment decisions and active ownership.

Impact investing is an investment strategy aiming to have a positive environmental or social impact i.e. investing in companies that sell products and/or solutions with the intent to have a sustainable impact. ESG focuses on the environmental, social & governance factors in a company’s operation and it can be used in addition to measure and enhance risk management.

and the portfolio investments into account. Specialized service providers, such as AssetMetrix, have to offer a seamless and efficient setup and support Limited Partners (LPs) to collect the appropriate documents from their fund managers and derive ESG scores, ideally, from the portfolio data they already have. As a Limited Partner it is not always easy to continuously request data from GPs. For this reason, it is helpful and more efficient when the solution builds on data that is usually already available to limit the data requests to GPs to the minimum necessary.

There are numerous players on the market. AssetMetrix has, after thorough research, chosen to focus on the United Nations’ Sustainable Development Goals (UN SDGs), the Sustainability Accounting Standards Board (SASB) and the Institutional Limited Partners Association (ILPA).