Implementing ESG in private equity 2.0 – LGT Capital Partners

Every business leaves a footprint on society and the environment, and every business is able to manage this footprint.

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Among all the 'E' issues, climate change is the one that currently most concerns managers, according to LGT Capital Partners' study. As a result, more managers are focusing on carbon emissions in their portfolio companies and some managers have even started working towards carbon neutrality of their portfolio companies.

Among 'S' topics, health and safety stands out as a concern for private equity managers. The focus can be linked to the increasing attention for health and safety issues in many jurisdictions around the world, as well as the growing conviction that employee well-being is critical to the success of a business. 

Private equity managers have been integrating governance considerations into their decision-making long before ESG came to prominence. It reflects the distinctive nature of private equity investing, where strong governance lays a stable foundation for managers to build value in portfolio companies. Among governance-related topics, bribery and corruption stands out as the number one concern for theirr managers.

Against the backdrop of mounting environmental, economic, social and political challenges the private equity industry has the opportunity, obligation and self-interest to become a force for more sustainable business practices. LGT CP are eager to support the much needed shift in the private equity industry towards a more long-term and comprehensive value creation that addresses the broader footprint of companies in society and the environment.

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