Français

Les crises multiples des dernières années ont servi de réveil au monde pour créer des économies et des systèmes plus durables afin d’éviter de nouvelles pandémies, de réduire les risques du changement climatique, de construire une société plus équitable et de générer encore de la croissance. Les entreprises du monde entier reconnaissent maintenant les critères ESG comme un moteur de création de valeur et développent de toute urgence un état d’esprit ESG proactif. Les sociétés de Private Equity sont bien placées pour fournir un leadership dans l’investissement durable, avec des décennies d’expérience dans la priorisation d’une approche stratégique et à long terme de création de valeur. L’investissement durable a déjà atteint plus de 30 000 Mds$ dans le monde, les actifs axés sur l’ESG ont augmenté d’environ 5 000 Mds$ entre 2018 et 2020 aux États-Unis seulement. Les sociétés de Private Equity qui placent les critères ESG au cœur de leur stratégie commerciale seront les moteurs du changement dans la nouvelle économie durable.

English

The past years of multiple crises have served as a wake-up call for the world to create more sustainable economies and systems to prevent pandemics, reduce climate change risks, build a more equitable society, and still generate growth. Businesses worldwide are now acknowledging ESG as a driver of value creation and urgently developing a proactive ESG mindset. Private equity firms are well-placed to provide leadership in sustainable investing, with decades of experience prioritizing a long-term, activist approach to value creation. Sustainable investing has already grown to more than US$30tn globally, with ESG-focused assets under management growing by some US$5tn from 2018 to 2020 in the US alone. PE firms putting ESG at the heart of their business strategy will be the game changers in the new sustainable economy.

1. Entering the age of maturity : 

• Private equity (PE) firms have shifted their attitude towards ESG, from being a tangential area of compliance to an overarching framework informing strategic thinking
• The maturity is driven by various factors, including the financial impact of ESG factors, the performance of ESG-focused funds, and the growing attention to ESG at the board level
• ESG is influencing business strategy throughout the transaction life cycle and across portfolios, with firms using ESG criteria to assess risks, identify value creation opportunities, manage portfolios, and deliver better investments at exit
• The adoption of or alignment with the SDGs as a framework is becoming more popular as they offer a universal approach to realizing positive societal outcomes and provide a level of rigor in identifying overarching goals and targets

2. Creating value for investors and society : 

• Respondents to a survey put a premium on value creation as the top driver of ESG activity, indicating a more proactive ESG mindset among PE firms.
• The transition to sustainability offers real business opportunities, and there is a growing recognition among managing partners that ESG is a lever for transformation.
• ESG is too important to be compartmentalized into a specialist department, with over half the firms surveyed saying that ultimate responsibility for ESG and responsible investing rests with the firm’s partners.
• Investing for impact is becoming a mainstream strategy within PE, with 17% of respondents already having dedicated impact funds or planning to set them up in the next year, and 14% considering investing for impact in the future.

3. Easy as ESG : the drivers of sustainable success 

• Employing a comprehensive ESG strategy requires firms to consider a wide range of specific factors
• 90% of the responding firms are concerned about diversity and inclusion
• Concerns about ESG issues are not always reflected in actions taken to address them
• Climate risk is becoming a more important topic for investors and requires a greater level of knowledge and sophistication from PE firms
• 68% are a signatory of the United Nations PRI
• Diversity and inclusion are becoming a higher priority in a globalized workforce where firms compete for a new generation of talent
• Prevention of bribery and corruption remains a top governance concern for business, while ESG regulation and governance of ESG risks and opportunities are becoming more important for firms and portfolio companies.