Today, Pitchbook released its annual Private Equity ESG Survey Report featuring a question and answer with Malk Partner’s Managing Partner, Andrew Malk. The report draws on more than 140 general partner and limited partner respondents to examine how PE professionals and portfolio companies are integrating various ESG issues. This is the third annual version of the Pitchbook report and shows the growing trend of interest in ESG from both LPs and GPs.
For the report, Pitchbook interviewed Malk Partners to include added narrative from a firm practicing the implementation of issues on which the survey reports.
Questions asked in the interview include: “What are some of the more pressing ESG initiatives that private equity firms are asking you to work on today?” And “Aside from LP pressure, what factors are driving GPs to implement ESG initiatives?”
Other notable findings from the report include:
- Greater than 80% of firms surveyed plan to increase their attention to ESG issues in the future
- 39% of firms surveyed cited cost management as a factor driving ESG efforts, compared to 24% in 2013
- Firms surveyed report that ESG issues are most important when exiting a company via IPO, followed by secondary buyout and least important when exiting via corporate acquisition
- Greater than 60% of LPs surveyed reported that their focus on ESG issues has increased in the last three years
- Greater than 30% of LPs surveyed reported that they would rather commit to a GP with a strong ESG program and slightly lower performance than a GP with no ESG program but top quartile performance. This compares to ~20% in 2013
The full report can be downloaded from Pitchbook’s website, here.
Malk Partners is a specialty management consultancy that guides private equity investors to leverage ESG management to maximize returns and thrive in an era of increasing stakeholder interest in responsible investment. Malk’s expertise lies in developing customized programs to protect and create value through ESG management. We drive all steps of the ESG program development process from articulating a policy and strategy through implementing initiatives to reporting, and do so in a manner that aligns to our clients’ standard practices and prioritizes their portfolio company relationships.
Malk Partners’s flagship ESG in Private Equity study reviewed the sustainability requirements that large enterprise customers put on middle-market private equity firms for the 2014 annual version.