Older and wiser: is responsible investment coming of age?

Private Equity Responsible Investment Survey 2019

Private equity (PE) houses and their investors are increasingly engaging with responsible investment. Environment, Social and Governance (ESG) considerations are becoming important factors in investment decision making and portfolio management. We surveyed 162 PE firms (General Partners or GPs) and investors (Limited Partners or LPs) to explore how they were implementing and developing their responsible investment approach.

It’s clear that the approach is maturing, particularly in Europe. 91% of respondents have already adopted or are currently developing a responsible investment policy. And a vast majority (72%) either currently use or are developing KPIs to track, measure and report on the progress of their policy. The number of dedicated responsible investment or ESG teams is also on the rise at 35% (compared to 27% in 2016).

GPs and LPs aren’t just talking about these issues, they’re taking concrete action, particularly around governance, health and safety and human rights for portfolio companies. However much remains to be done in monitoring and reporting, climate risk and valuing ESG initiatives.

Explore emerging themes

67% of respondents have identified and prioritised SDGs that are relevant to their investments

60% of respondents have already implemented measures to address human rights

83% of respondents are concerned about climate risks in their portfolio

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Moving ahead – what the PE community should be asking themselves:

  1. Have you translated your responsible investment policy and commitments into concrete action?
  2. Is responsible investment a core component of your risk management approach?
  3. After completing (ESG) due diligence on a portfolio company, do you keep engaging on material ESG issues and do you monitor the company’s ESG performance?
  4. When reporting, are you able to distil key facts and challenges on material issues, such as climate or human rights, rather than bundling them under the label of ‘ESG’?
  5. Can you explain how a robust responsible investment policy has added value to your portfolio and can you leverage that at exit?

“The private equity (PE) sector has a vital role to play in sustainable development. It is heartening to see that responsible investment is seen as a matter for those at the centre of the investment process and needs to be supported by rigorous reporting and monitoring.”

Will Jackson-Moore, Global Private Equity, Real Assets and Sovereign Fund Leader, PwC UK

Contact us

Will Jackson-Moore

Global Private Equity, Real Assets and Sovereign Funds Leader, PwC United Kingdom

Tel: +44 (0)7710 157 908

Emilie Bobin

Partner, Sustainability, PwC France

Tel: +33 1 56 57 86 60

Phil Case

Director, PwC United Kingdom

Tel: +44 (0)7843 367 988

Joukje Janssen

Partner, PwC Netherlands

Tel: +31 (0)88 792 59 28

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