European private equity managers are setting a high bar in environmental, social and governance performance, with half (51%) of the region’s managers now earning an “excellent” rating, according to LGT Capital Partners’s ESG Report 2024.
This marks an improvement from last year’s 42%, indicating a growing commitment to sustainable investment practices in Europe, as reported by Environmental Finance. The report assesses the ESG initiatives of 380 alternative investment managers globally, including more than 300 private equity firms.
The findings highlight Europe’s leadership in ESG integration, with 87% of the region’s managers receiving either an “excellent” or “good” rating. In comparison, Asian private equity managers also made gains, with “excellent” ratings increasing from 29% to 34% over the past year. Meanwhile, the US lags behind, with only 16% achieving an “excellent” rating, although more than half of US managers still rank in the top two categories.
The rise in ESG practices among European managers is particularly striking given the global landscape a decade ago, when only 25% had strong ESG frameworks.
Tycho Sneyers, Managing Partner at LGT Capital Partners, commented: “The consistent improvement in ESG performance among European managers reflects not only changes in regulatory environments but also a stronger commitment to sustainable investment principles that resonate with global investors. This dedication is crucial as it aligns investor values with long-term societal benefits.”
