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New survey highlights the value created by ESG integration in the PE sector

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New survey highlights the value created by ESG integration in the PE sector

10 June 2016,10:30

Environmental Resources Management (ERM) – a global provider of ESG consulting services – launched its “ESG: The Multiplier Effect” report at Private Equity International’s ‘Responsible Investment Forum’ on 25 May 2016.

The findings are based on interviews with 60 general partners (GPs) and limited partners (LPs) from around the world, but primarily from Europe and North America.

The key findings of the survey include:

  • Around 70% of respondents stated that ESG issues had a material impact on their investment. Of the material impact identified, 60% was from value protection and 40% was due to value enhancement. However, the report suggests that value protection may be easier to quantify than value enhancement.
  • Over 95% of respondents stated that there was “significant untapped value from ESG” within their portfolio companies.
  • Senior management buy-in, input from ESG teams, integration at each stage of the deal process and sharing best practice between portfolio companies were identified as the key factors enabling ESG integration.
  • A quarter of respondents stated that strong ESG performance in their portfolio had increased the GP’s ability to fundraise. For example, one large-cap US firm reported that it had raised several hundred million more dollars because of its well-regarded commitment to ESG.

Click here to read the full report ESG: The Multiplier Effect.

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