Multiple crises over the past 18 months have delivered a
stark wake-up call to the world. If we’re going to prevent further pandemics,
reduce the risks of climate change, build a more equitable society and still
generate growth, it’s clear that we’ll have to create more sustainable
economies and systems.
Businesses all over the world are adapting, moving
environmental, social and governance (ESG) issues from the periphery of
strategic concern to the centre. They’re acknowledging ESG as a driver of value
creation and urgently developing a proactive ESG mindset. PwC’s latest Global
Private Equity Responsible Investment Survey demonstrates that private equity
(PE) is on this same journey and is well-placed to provide leadership, thanks
to decades of experience prioritising a strategic, long-term, activist approach
to value creation.
The stakes are high. Sustainable investing—a category that
includes ESG investing, in which ESG considerations are an overlay to the
pursuit of financial performance, and socially responsible investing (RI), in
which investments are selected or disqualified based on ethical
considerations—already had grown to more than US$30tn globally by 2018 and has
continued to grow. Just in the US, ESG-focused assets under management grew by
some US$5tn from 2018 to 2020, and the global impact investing market—a segment
of the sustainable investing market that focuses on positive outcomes,
regardless of returns—is now estimated to be worth about US$715bn.
PE firms putting ESG at the heart of their business strategy
will be the game changers in the new sustainable economy. And just as there
will be leaders, there will also be laggards. Those firms that fail to embrace
ESG will risk value erosion.
Our survey shows how PE firms are best adopting sustainable
investing. In particular, it explains:
- that firms are entering a new age of ESG maturity
- why ESG is becoming key to value creation
- what is driving enduring business success.
Will Jackson-Moore - Global Private Equity, Real Assets and Sovereign Funds
Leader, PwC United Kingdom
Emilie Bobin - Partner, Sustainability, PwC France
Joukje Janssen - Partner, Sustainability, PwC Netherlands
Nicky Crawford - Director, PwC United Kingdom
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