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ESG aims for private equity investors

ESG aims for private equity investors

Wednesday 24 June 2020

ESG aims for private equity investors


According to a new study, 88% of private equity investors plan to step up their efforts to manage and measure Environmental, Social, and Governance performance in their portfolio companies over the next two years, yet almost half are concerned they might leave themselves open to accusations of 'greenwashing'.

Intertrust ran the survey to find out how ESG targets will impact on businesses.

General partners highlighted the three biggest obstacles to implementing ESG programmes at a portfolio company level as quantifying and monitoring their impact; cost and resource constraints; and managing multiple sources of ESG data.

Underlining the complexities involved in the process, GPs predict that it will take over five years before they can produce standardised ESG data across their portfolio companies.

According to Intertrust, this will 'put the onus on tech-enabled service providers to deliver flexible solutions that can provide independent ESG assessments and benchmarks as well as offer GPs flexibility in adhering to different standards that are constantly changing'.

Intertrust’s Head of Funds in Guernsey, Kees Jager, said that the islands’ experience in the funds space will ensure a high-quality service when advising and implementing ESG programmes for clients around the world.

“We’ve seen a steady increase in the number of ESG measures being put in place by our clients. The Channel Islands’ has proven expertise as a fund servicing jurisdiction. This combined with the technological advancements we’ve made and our team of experienced fund professionals means we can implement the ESG solutions private equity professionals are looking for.”

The survey found that while the majority (54%) of respondents believe they will ultimately benefit from a greater focus on ESG over the coming two years, a sizeable minority (32%) are pessimistic about what they will receive in return. Moreover, only 27% believe that the coronavirus will lead to a greater focus on ESG investing as the role of business in society comes under increasing scrutiny.

Pictured top: Kees Jager. 

 

 

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