Private equity firms ready to adopt ESG principles: Ethos survey

Report follows launch of SRI private equity fund-of-funds.

Private equity investment houses remain unfamiliar with the practical implications of responsible investment but are increasingly conscious of the principles and ready to develop and implement them, according to a survey by Ethos, the 84-member Swiss sustainable investor group comprised mostly of pension funds. The survey was produced by Ethos and Unigestion, the Swiss fund manager, after the two recently jointly launched a novel SRI private equity fund of funds: Unigestion-Ethos Environmental Sustainability LP. Ethos said the questionnaire had been sent to 37 private equity houses active in the environmental area, of which 21 agreed torespond. It looked at three issues: integration of environmental, social and governance factors into investment considerations, relevant dialogue with portfolio companies, and transparency of reporting. The majority of respondents said they took into consideration ESG issues for investment decisions, although Ethos noted that just eight had adopted management procedures to guarantee that process. Additionally, 18 of the responding firms said they had regular ESG dialogues with their portfolio companies. A further 16 respondents said they would be willing to publish an ESG report for their investors alongside financial reporting.