Europe’s commitment to ESG standards within the private equity sector has seen significant strides, with half of the region’s managers now achieving an “excellent” rating, as outlined in the latest ESG Report 2024 by LGT Capital Partners.
According to Environmental Finance, this marks a considerable improvement from the previous year’s 42%, demonstrating a growing dedication to sustainable practices. The report evaluates the ESG initiatives of 380 alternative investment managers globally, including over 300 private equity firms.
The overall assessment presents a promising picture, with 87% of European managers securing either an “excellent” or “good” rating, reflecting the region’s leadership in integrating ESG criteria into investment strategies. In contrast, Asian private equity managers have also shown progress, with the number of “excellent” ratings rising from 29% to 34% over the past year. However, the US lags slightly behind, with only 16% achieving an “excellent” rating, though over half still place in the top two categories.
The advancement in ESG practices among European managers is particularly notable compared to the global landscape a decade ago, where only one-quarter had robust ESG processes. This evolution signifies a shift towards more responsible investing practices in the private equity sector, aligning financial goals with societal and environmental responsibilities.
LGT Capital Partners CEO, Roberto Paganoni, highlighted the significance of these findings. “The sustained increase in ESG performance across European managers not only reflects a shift in regulatory landscapes but also a deeper commitment to sustainable investment principles that resonate with global investors,” Roberto Paganoni said, “This dedication is pivotal as it aligns investor values with long-term societal benefits.”
