Adapting ESG to private equity markets for greater clarity and value

In recent years, social and environmental challenges have pushed the business world to see value as more than just financial. Environmental, social and governance (ESG) impacts are now regularly considered in investment decisions. But while ESG has become an integral part of the investment landscape, it has also been shaped by pressures from all sides: political polarization, the performance and data of energy and industrial companies, and concerns about greenwashing have dampened some investors’ initial enthusiasm.

However, ESG is not going away. European investors’ demand for green investments and the increasing consideration of ESG in due diligence and tenders have made it clear that private equity investors looking to raise capital must continue to take this into account in their decisions. Private equity is positioning itself with impact funds.

Getting the most out of ESG

Private equity firms that know how to measure, assess and manage ESG objectives throughout the transaction lifecycle and within portfolio companies can achieve tangible benefits, including environmental and social impacts, positive client and investor outcomes, increased investor satisfaction and improved investment performance.

For more information on how Deloitte helps companies make progress on their journey to long-term sustainability and value creation, visit our Sustainability and Climate website.