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Almost 20 per cent of global private capital CFOs have yet to begin integrating ESG into investment processes

New research from Intertrust, a specialist in providing administration services to clients in over 30 jurisdictions, has revealed that CFOs continue to fear cost and resource constraints as client demands grow around ESG, citing those factors as the “biggest obstacles” surrounding ESG integration.

Intertrust Group’s new report, The future private capital CFO: Unleashing potential in the ESG era, finds that while 95 per cent of CFOs realise their limited partners (LPs) view ESG as important, less than a third (28 per cent) have already completed their ESG integration process. It also finds that 84 per cent of CFOs claim to have an ESG, CSR or sustainability policy in place at their firms, highlighting the understanding and demand to make a change.
The report created in partnership with Global Custodian, shows that CFOs at private capital funds find the biggest obstacle of integrating ESG into the investment process is the cost and resource constraints, with more than half (57 per cent) agreeing this was the most challenging aspect to the process. This was closely followed by the complexity of managing multiple sources of ESG data (51 per cent) and quantifying and monitoring the ESG implementation process (48 per cent), demonstrating that there is some way to go to satisfy LPs expectations when it comes to ESG.
Intertrust Group warns that private capital funds must either meet these ESG demands or face significant competitive disadvantages and possibly regulatory pressures in the future. Many CFOs are aware of the need to adapt and almost two thirds are investing in expanding their technology framework to meet ESG data processing demands. More than half have also committed to increasing the size of the in-house finance team. In addition to acquiring talent, almost 50 per cent of CFOs say they plan to complement their teams with outsourced help in technology and operations. Furthering this, more than two fifths of CFOs (43 per cent) would evaluate their portfolio’s ESG performance on a weekly basis and a quarter (25 per cent) of CFOs would take a look daily.

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