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ERM survey highlights use of ESG to create value

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ERM survey highlights use of ESG to create value

14 March 2017,13:30

Environmental Resources Management (ERM), a leading environmental and social consultancy, published the results from a survey of 60 general partners (GPs) and limited partners (LPs) in February 2017. Over 95% of the respondents – representing US$1.3 trillion in assets under management – believed that there was significant untapped value from ESG within their portfolio companies.

ERM identified the following factors – among others – as key to “ESG success”:

  • Leadership – 85% of respondents believed that senior management buy-in within a GP was key.
  • Expertise – 77% of respondents thought that developing ESG competence within a GP and / or having access to expertise were key.
  • Integration – 75% of respondents thought that integration of ESG in the deal process of the GP was key.

ERM also identified a number of case studies from their interviews with respondents which highlight the value added by effective integration of ESG. For instance, one unnamed GP generated over US$60m in operational savings from energy efficiency through disciplined resource management. ERM also highlight the importance of identifying value creation initiatives systematically at the start of the investment cycle, so that actions can be integrated into the broader investment thesis and sequenced appropriately in the holding period. The report concludes by suggesting that there is growing evidence that explicitly considering ESG factors leads to greater financial value being realised by funds.

Click on the following link for the full article: The recipe for ESG success: A survey by ERM demonstrates how ESG factors are being used to create value.

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