Responsible investing is on the rise, however, investors face continuing challenges, including misconceptions, to implement responsible investing in private equity. A recently updated Principles for Responsible Investment (PRI) guide designed for limited partners – from venture capitalists to secondary investors – aims to address these challenges.
Responsible investing is growing because of greater industry awareness and understanding of core environmental, social and governance (ESG) issues such as climate change. The latest version of the Technical Guide for Limited Partners: Responsible Investment in Private Equity builds on past editions to respond to this growing demand.
The PRI guide, co-authored with Mantle314 and Verability, delivers actionable ideas for more experienced responsible investors, breaks down common responsible investing myths and barriers, and contains new material to help beginners.
“The new guide is an excellent resource for private equity investors whether they are just beginning to implement responsible investing or are already well on the journey,” said Joy Williams, co-author and senior advisor at Mantle314. “The third edition of the guide is now truly a one-stop reference all private equity investors should have.”
Mantle314 and Verability conducted interviews of private equity professionals to understand the latest perspectives and roadblocks to incorporate ESG factors into responsible investment decisions. These insights provided the foundation for the guide.
“The day-to-day context in which limited partners implement responsible investing practices has shifted since PRI’s last guidance in 2011,” said Sonal Mahida, co-author and managing director at Verability. “The new version addresses pertinent industry developments, including the increasing recognition of ESG materiality and the consequential regulatory changes.”
“This guide provides limited partners with the necessary framework to ensure their investments are managed appropriately and in line with their interests,” Mahida said.
The economic fallout from the ongoing COVID-19 health crisis has fuelled interest in responsible investing. Prominent ESG managers say the pandemic has only redoubled their belief that ESG investing is the right strategy, while ESG stocks have outperformed the global average.