The Principles for Responsible Investment (PRI) have launched a guide covering integration of environmental, social and governance (ESG) factors in private equity.
Integrating ESG in private equity – a guide for general partners is designed to give general partners a link between the integration of ESG and organisational governance, structure and culture, said Fiona Reynolds, PRI managing director.
“The guide can also help limited partners (LPs) to understand the different ESG integration practices currently being implemented in the market,” said Tim van der Weide at PGGM and chair of the PRI’s Private Equity Steering Committee. “This will in turn facilitate discussions with their GPs during both fund selection and monitoring on what is reasonably possible.”
PRI engaged strategy consulting firm Spring Associates to work with the PRI GP Guide Working Group in developing the publication. Interviews were carried out with over 50 GPs and LPs worldwide, covering a range of investment strategies and fund size. Interviewees include representatives at Kohlberg Kravis Roberts & Co. L.P., TPG Capital, Investec Asset Management, IDFC Alternatives, Pantheon and Australia’s Ironbridge Capital.
“By adopting and applying an ESG lens throughout the various investment stages, private equity has the opportunity to tap in to value creation and preservation potential. The examples in this report are there for the taking.” said Maarten Biermans at Spring Associates.