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Snapshot | ESG Programs and Practices of the Ten Largest PE Firms

September 2023
We are pleased to share our inaugural snapshot of the environmental, social, and governance (ESG) policies and programs of the world’s ten largest private equity (PE) firms*.

Methodology:

We reviewed publicly available ESG policies, annual ESG and sustainability-aligned reports, and other information (such as firm websites, regulatory filings, press releases, etc.) of the ten PE firms, distilling insights on their ESG policies, processes, and initiatives. All materials referenced are the latest versions available as of June 30, 2023.

Key Findings:

Our analysis covers the following key components of the PE firms’ ESG programs and practices:

 

  • ESG Oversight
  • ESG Reporting
  • Integrating Environmental Considerations into Portfolio Management
  • Integrating Diversity Considerations into Portfolio Management
  • Industry Engagement
  • Impact Investing
  • Firm-level Initiatives: Operational Sustainability and Diversity, Equity & Inclusion (DEI)

 

Our analysis shows variation in how the ten largest PE firms are structuring, resourcing, integrating, and reporting on ESG across their organizations and investment strategies, echoing the range of approaches in the space. However, a few commonalities did emerge: six firms have disclosed setting emissions reduction targets for at least some funds and/or strategies, seven firms publish Task Force on Climate-related Financial Disclosures (TCFD) -aligned reporting for at least one of their investment vehicles, and all ten firms are signatories of the Principles for Responsible Investment (PRI).

 

As strategic consultants to private markets investors, Blue Dot continues to keep a close eye on how ESG integration and impact investing approaches in private markets are evolving. Materiality, scalability of processes, and operational value creation are recurring themes in our conversations with executive, investment, and ESG teams of private markets firms. We believe that over the next few years, private markets ESG integration will be marked by the need for efficient, streamlined processes and quantifiable value creation and risk management outcomes. Buoyed by technological advancement, policy stimulus, and accelerated learning curves, climate-focused fund formation will continue.

 

We hope you find this Snapshot helpful to understand how ESG integration processes in private markets are institutionalizing.

*Per Private Equity International’s 2023 PEI 300 ranking
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