3 reasons why private equity can lead the charge on ESG strategy

3 reasons why private equity can lead the charge on ESG strategy

The conversation about private equity and environmental, social and corporate governance (ESG) has been largely around reporting guidelines and metrics.

We believe private equity is well-positioned to drive and scale ESG best practices.

The motivation to lead the charge on ESG performance improvement can be grounded in strategy and operational excellence.



It isn't a surprise that the majority of recent discussion around private equity and environmental, social and corporate governance (ESG) has centered around reporting guidelines and metrics as firms are rushing to meet their investors’ rising expectations on ESG compliance.

While metrics and compliance are clearly important, the private equity sector is missing a far greater opportunity within our reach: we can lead in the creation and propagation of ESG best practices across global portfolios.

And why not?



For one, private equity has a perception problem. It's known for its ability to drive operational improvement, especially growth and productivity, which can fuel attractive returns for its endowment, foundation and pension fund investors.

But I believe the flip side to such investment success is the incorrect perception that the asset class is purely oriented toward the short-term, overlooking the evidence that many private equity managers build in long-term value aligned