PE investors view ESG as ‘supportive activity towards value creation’
It is becoming increasingly clear that private equity investors are training their sights on how GPs think about ESG issues. The degree to which they engage on the topic, and their approach to influencing portfolio companies, is now firmly entrenched in manager selection and it is a trend that is not likely to reverse anytime soon.
One of the pioneers in sustainable investing is LGT Capital Partners. It uses something known as the ESG Cockpit to track company KPIs within the public markets, across equities and fixed income, which informs the team’s security selection. This approach has led LGT to create synergies and use analytical insights gleaned from the public markets to build an ESG framework for rating managers in its private market portfolios.