PRI publishes guide to integrating ESG in private equity
LONDON, 10 April 2014
The Principles for Responsible Investment (PRI) today launched a new guide to assist with the integration of environmental, social and governance (ESG) factors within private equity: Integrating ESG in private equity – a guide for general partners.
PRI Managing Director, Fiona Reynolds, said “we are pleased to launch this guide for our signatories, which for the first time provides general partners (GPs) with a link between the integration of ESG and organisational governance, structure and culture”.
Tim van der Weide at PGGM and Chair of the PRI’s Private Equity Steering Committee stated, “the guide can also help limited partners (LPs) to understand the different ESG integration practices currently being implemented in the market. This will in turn facilitate discussions with their GPs during both fund selection and monitoring on what is reasonably possible.”
Haran Narulla, Partner at Blue Wolf Capital Partners and Chair of the PRI GP Guide Working Group added, “The guide offers a hands-on review of how incorporating ESG factors into the investment process can influence results. We anticipate that the case studies will serve as models for GPs and LPs to build best practices as they enhance their ESG capabilities”.
The PRI engaged strategy consulting firm Spring Associates, to work with the PRI GP Guide Working Group to develop the new publication. “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.
To gain insights into the current ESG practices being used in the market, 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 Ironbridge Capital. A full list of organisations participating in the development of this guide is available here.
A copy of the new ‘Integrating ESG in private equity – a guide for general partners’ and the selection of case studies are now available online.