Private equity is reinventing itself from ruthless to responsible, and from opaque to transparent. PE houses believe in the value that effective management of environmental, social and governance issues can bring (this is the lens through which PE houses view responsible investment). How do we know - we compared results from our 2016 survey with those we collected in 2013 to find:
have a formal responsible investment policy, up from 55%
also reporting to their investors on ESG activities, up from 56%
of the investment team now have some formal training, up from 55%
have now made a public commitment to invest responsibly, up from 57% in 2013
have tools to implement their responsible investment policy, up from 48%
There is a strong financial business case for responsible investment that’s evident throughout the deal cycle.
And the potential roadblocks on the road ahead ? ... cyber security, human rights and climate risks ... but there is strong awareness of the issues and no doubt action will follow to reduce risks …. on cyber security, for example, 85% are concerned, but only 27% have taken action.
But with the right leadership, investment, and support from investors (investor interest has more than doubled in three years from 21% to 46%) responsible investment will soon be the market norm.