ESG as an asset: Private equity considerations from the SEC’s climate proposal

Leading PE firms have long recognised that managing ESG factors helps create value. Our new survey shows most firms agree, seeing no conflict between ESG and returns. Here, we look at the industry's evolving approach—and highlight prospects for further gains

The private equity industry is witnessing a seismic shift towards responsible investing, driven by both internal and external factors. Inside the private equity firms, there is a strong drive to embrace Environmental, Social, and Governance (ESG) principles. Leaders in private equity recognize their role in society and the responsibility that comes with it. 

Most PE firms aim to create value with ESG

Outside, the private equity sector faces growing environmental and political pressure to lead in ESG-focused investing. The younger generation's preference for ESG in private equity and the better performance of ESG-focused private equity funds provide compelling reasons for private equity firms to adopt ESG-friendly investment strategies. 

Our Clients' Success with ESG in Private Equity funds

Trustmoore, as a provider of ESG tools and assistance, understands the drive within the private equity market to commit to ESG change. We offer tailored solutions to help private equity firms align their portfolio company investments with ESG factors, ensuring responsible investment strategies. 

Regulatory Framework: EU Taxonomies and Private Equity's ESG Commitment

69% of private equity firms have committed to at least one UN Sustainable Development Goal (SDG), reflecting the industry's alignment with global ESG initiatives. The EU taxonomies provide a clear framework for understanding what ESG means in practical terms, extending beyond a company's focus on its activities. 

Our Approach to ESG private equity funds

Trustmoore's ESG tools are designed to help private equity firms navigate the complex regulatory landscape, ensuring compliance with EU taxonomies and other ESG-related regulations. Our services enable private equity firms to manage ESG risks and align their investment strategies with responsible investing principles. 

Few PE firms align ESG goals with financial benefits

Turning drive into action is a significant challenge for private equity firms. Aligning financial and ESG goals requires wise, ethical, sustainable, and responsible leadership. Private equity firms must communicate their ESG targets clearly to their portfolio companies, setting specific, easily checked, and regularly reported goals. 

Seeking ESG's value throughout the deal life cycle

Trustmoore's leadership in providing ESG assistance to the private equity industry ensures that ESG strategy is not just a buzzword but a business success factor. We help private equity and venture capital firms actively discuss ESG targets in boardrooms, fostering a culture of responsible investment and sustainable growth throughout the deal life cycle. 

Implementing Standardized ESG Tools and Metrics to Improve SFDR reporting

Understanding and control are vital for implementing an effective ESG strategy in the private equity markets. Many private equity firms struggle with tracking and reporting ESG performance due to the fragmented structure of the sector.

Embedding ESG in core activities

Trustmoore offers data-driven ESG control systems tailored to the needs of private equity firms, including those in the Netherlands. Our tools help private equity firms overcome challenges in developing standard ESG Key Performance Indicators (KPIs) and invest in ESG tracking and reporting tools.

Transparancy and compliance ESG considerations

Our services empower private equity firms to take control of their ESG initiatives, ensuring transparency, compliance, and alignment with ESG factors. Trustmoore's commitment to supporting the private equity industry in its ESG journey reflects our belief in the power of responsible investing to shape a more sustainable economy.  

PE firms should start thinking about their sustainability agenda

The private equity market stands at the forefront of shaping sustainable businesses. Trustmoore's ESG tools and assistance enable private equity firms to drive ESG change, contributing to a more sustainable and responsible investment landscape. By focusing on Drive, Understanding & Control, and Action & Leadership, we help private equity firms become leaders in ESG change, meeting the demands of clients looking for sustainable and responsible investments.

Reach out to us today

Lotte Thonen
[email protected]