European PE team publishes 2020 ESG REPORT
Stafford Capital Partners’ European Private Equity Team has published the 14th edition of its annual ESG engagement report. The report summarizes results of Stafford’s 2020 ESG survey and brings an update on the climate-related activities and ESG and SDG reporting of private equity managers in Stafford’s ESG Engagement Program.
58 private equity fund managers have participated in the latest ESG survey. According to the survey results, 98% of fund managers now have some form of a responsible investment policy in place. Many of them have also included climate-change considerations in this policy. The survey results also show a further increase in the number of fund managers who incorporate ESG factors in different stages of their investment process, while the proportion of fund managers who provide ESG disclosures remained stable, at around 60%. In addition, the consideration of the potential impacts of climate change is slowly rising in importance on the agendas of the fund managers, since only 30% of the survey participants currently report to use emissions data in their investment decision making.
The 2020 ESG survey further shows that more than 30% of the participants now relate their portfolio companies to the UN Sustainable Development Goals (SDGs) in some way. Nevertheless, only one-tenth of the managers currently provide quantitative data on the contribution of their investments to the SDGs.
Stafford’s 2020 engagement annual report also includes insights and recommendations for private equity investors on how to deal with the occupational health and safety (OHS) and data privacy and cyber-security issues throughout their investment process (and in their internal operations). The importance of both topics has further increased during the Covid-19 pandemic. More than 30% of the managers in Stafford’s ESG program have reported to engage with portfolio companies on OHS to promote improvements in this respect. At the same time, it is rather surprising that only 10% of all managers have incorporated cyber security and data privacy into their overall ESG or responsible investment approach and abouts 20% use specific KPIs for monitoring their portfolio companies.
Finally, the report is also enriched with two case studies highlighting how the ESG frameworks formation has evolved in two European Private Equity firms with different investment strategies.
Stafford uses the results of the annual assessment and its research findings on OHS and cyber security as input for the feedback sessions with fund managers which usually take place in September. Through the dialogue Stafford exchanges ideas for ways to enhance the managers’ ESG programs and aims to contribute to a more sustainable private equity market in this way.
Stafford will email the report directly to you once your profile has been identified.
