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Private Equity: Assessing ESG risks and opportunities

Insight
8 August 2023 |
Active ESG
The effective integration of ESG issues into private equity can be a complicated exercise, owing to the ‘long-hold’ nature of the asset class. Diligent management of the relevant ESG risks and opportunities is therefore necessary and can form a crucial part of the investment process.
Private Equity: Assessing ESG risks and opportunities

Fast reading:

  • We believe that to truly understand the risks and opportunities of an investment, we must consider all material factors, including ESG considerations.
  • For private equity – a long-hold asset class with investment horizons of between five and seven years per investment – it is even more crucial to maintain a good understanding of all relevant ESG risks and opportunities, as these risks may materialise during the holding period or affect the exit prospects of a company. Good management of ESG risks, especially when better than peers, can enable a company to outperform over the long term.
  • The assessment of ESG risks and opportunities is fully integrated into our investment process and forms a core part of our fundamental analysis.

Private Equity: Assessing ESG risks and opportunities

Private Equity: Assessing ESG risks and opportunities

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