PRI Launches Private Equity – A Guide for ESG Integration

April 10, 2014

LONDON – The Principles for Responsible Investment (PRI) today launched a new guide to assist with the integration of environmental, social and governance (ESG) factors within private equity: Integrating ESG in private equity – a guide for general partners.

PRI Managing Director, Fiona Reynolds, said “we are pleased to launch this guide for our signatories, which for the first time provides general partners (GPs) with a link between the integration of ESG and organisational governance, structure and culture”.

Tim van der Weide at PGGM and Chair of the PRI’s Private Equity Steering Committee stated, “the guide can also help limited partners (LPs) to understand the different ESG integration practices currently being implemented in the market. This will in turn facilitate discussions with their GPs during both fund selection and monitoring on what is reasonably possible.”

Haran Narulla, Partner at Blue Wolf Capital Partners and Chair of the PRI GP Guide Working Group added, “The guide offers a hands-on review of how incorporating ESG factors into the investment process can influence results. We anticipate that the case studies will serve as models for GPs and LPs to build best practices as they enhance their ESG capabilities”.

The PRI engaged strategy consulting firm Spring Associates, to work with the PRI GP Guide Working Group to develop the new publication. “By adopting and applying an ESG lens throughout the various investment stages, private equity has the opportunity to tap in to value creation and preservation potential. The examples in this report are there for the taking.” said Maarten Biermans at Spring Associates.

“bcIMC’s participation in the PRI’s GP Guide Working Group demonstrates our commitment to advance responsible investing within our industry. This guide provides the private equity industry with strategies and practical tools to enable the integration of ESG factors into the investment process.” said Doug Pearce, CEO/CIO of the British Columbia Investment Management Corporation.

To gain insights into the current ESG practices being used in the market, interviews were carried out with over 50 GPs and LPs worldwide, covering a range of investment strategies and fund size. Interviewees include representatives at British Columbia Investment Management Corporation, TPG Capital, Investec Asset Management, IDFC Alternatives, Pantheon and Ironbridge Capital. A full list of organisations participating in the development of this guide is available here.

A copy of the new ‘Integrating ESG in private equity – a guide for general partners’ and the selection of case studies are now available online.

About the Principles for Responsible Investment
The Principles for Responsible Investment Initiative (PRI) is a network of international investors working together to put the six Principles for Responsible Investment into practice. The Principles were devised by the investment community. They reflect the view that environmental, social and corporate governance (ESG) issues can affect the performance of investment portfolios and therefore must be given appropriate consideration by investors if they are to fulfil their fiduciary (or equivalent) duty. The Principles provide a voluntary framework for all investors to incorporate ESG issues into their decision-making and ownership practices and so better align their objectives with those of society at large.

For further information, please contact:
Matthew McAdam
Associate Director, Communications and Events, PRI
+44 (0) 20 3714 3142