Key Highlights
- 78% of private equity firms have integrated ESG considerations into their investment process
- The global private equity ESG assets under management reached $1.2 trillion in 2023
- 65% of private equity firms have a dedicated ESG team or officer in 2023
- 82% of LPs (Limited Partners) now require ESG disclosures from their private equity managers
- 45% of private equity funds are now targeting net-zero carbon emissions by 2030
- Only 38% of private equity firms publicly report on their ESG metrics
- The increase in sustainable investments in private equity is projected to grow at a CAGR of 12% through 2025
- 54% of private equity investors consider ESG factors as a critical part of their investment decision-making
- 70% of private equity firms have improved their ESG data collection processes in 2023
- 60% of LPs increased their ESG due diligence requirements for private equity investments in 2023
- 55% of private equity deals in 2023 included ESG clauses or targets
- 80% of private equity firms see ESG as enhancing long-term value creation
- 47% of private equity firms have initiated climate risk assessments across their portfolios in 2023
Sustainable investing is no longer optional in private equity—it’s a game changer, with 78% of firms integrating ESG factors and assets under management reaching a staggering $1.2 trillion in 2023.
ESG Adoption and Integration in Private Equity
- 78% of private equity firms have integrated ESG considerations into their investment process
- The global private equity ESG assets under management reached $1.2 trillion in 2023
- 65% of private equity firms have a dedicated ESG team or officer in 2023
- 45% of private equity funds are now targeting net-zero carbon emissions by 2030
- The increase in sustainable investments in private equity is projected to grow at a CAGR of 12% through 2025
- 70% of private equity firms have improved their ESG data collection processes in 2023
- 55% of private equity deals in 2023 included ESG clauses or targets
- 80% of private equity firms see ESG as enhancing long-term value creation
- 42% of portfolio companies under private equity ownership have adopted renewable energy solutions
- 75% of private equity firms plan to increase ESG-related capital deployment over the next two years
- In 2023, 68% of private equity portfolios actively pursued diversity and inclusion initiatives
- 85% of private equity firms believe that ESG strategies improve their risk management processes
- 41% of private equity firms set specific sustainability KPIs for their portfolio companies in 2023
- 60% of private equity firms have engaged external ESG consultants or auditors in their practices
- 56% of private equity firms include social impact metrics in their ESG reporting
- 49% of private equity firms now have formalized climate risk mitigation strategies
- 40% of private equity firms offer sustainability training for their investment teams
- 64% of private equity firms reported a positive impact on portfolio companies' sustainability performance after ESG integration
- 78% of private equity firms report that ESG considerations influence their exit strategies
- 69% of private equity firms are implementing circular economy principles in their portfolio management
- 58% of private equity investors consider climate-related financial risks a high priority
- 48% of private equity firms have set science-based emissions reduction targets
- 55% of private equity firms participate in industry-specific sustainability initiatives
- 63% of private equity firms have adopted responsible investing policies aligned with global standards
- 29% of private equity firms are exploring or investing in green technologies
- The average duration of private equity holdings with ESG focus increased by 3 months in 2023
- 52% of private equity firms prioritize ESG integration in cross-border investments
- 44% of private equity firms have formed strategic alliances with sustainability-focused organizations in 2023
- 73% of LPs believe that ESG compliance adds value to investments
- 40% of private equity firms have implemented gender diversity initiatives within their portfolios by 2023
- 50% of private equity funds are considering sustainability-linked financing options in 2023
- 45% of private equity firms have made public commitments to the United Nations Sustainable Development Goals (SDGs)
- 54% of private equity firms include climate adaptation strategies in their investment planning
- 37% of private equity firms have adopted internal sustainability reporting frameworks
- 73% of private equity firms incorporate ESG factors to identify long-term competitive advantages
- 66% of private equity firms are engaging in active shareholder engagement on ESG issues
- 57% of private equity firms are planning to increase their sustainable investments by 2024
- 46% of private equity firms have introduced sustainability or ESG training programs for their portfolio companies’ management teams
- 69% of private equity investors say ESG factors help mitigate investment risks
- 45% of private equity firms have adopted green building standards within their real estate portfolios
- 77% of private equity firms see ESG integration as vital for fundraising success
- 33% of private equity firms are developing metrics for social impact in their investments
- 49% of private equity investors have increased their scrutiny of portfolio companies' environmental practices over the past year
ESG Adoption and Integration in Private Equity Interpretation
ESG Monitoring, Reporting, and Green Practices
- 47% of private equity firms have initiated climate risk assessments across their portfolios in 2023
- The average ESG score of private equity portfolio companies increased by 15% from 2022 to 2023
- 23% of private equity firms experienced challenges in measuring ESG impact
- 72% of private equity firms have integrated climate-related financial disclosures in compliance with TCFD recommendations
- 49% of private equity firms are actively engaging portfolio companies on ESG issues through formal dialogue
- 67% of private equity firms have improved transparency around their ESG practices in 2023
- 54% of private equity firms measure their portfolio companies’ water usage and management
- 70% of private equity firms have disclosed their carbon footprint publicly
- 62% of private equity firms increased their ESG reporting scope in 2023
- 59% of private equity firms conduct regular ESG audits across their portfolio companies
- 65% of private equity firms are planning to report on their climate-related impacts aligned with TCFD
- 54% of private equity firms are focusing on social impact measurement
- 58% of private equity firms actively monitor their portfolio companies' supply chain sustainability
ESG Monitoring, Reporting, and Green Practices Interpretation
Regulatory and Investor Demand for ESG
- 82% of LPs (Limited Partners) now require ESG disclosures from their private equity managers
- Only 38% of private equity firms publicly report on their ESG metrics
- 54% of private equity investors consider ESG factors as a critical part of their investment decision-making
- 60% of LPs increased their ESG due diligence requirements for private equity investments in 2023
- 65% of private equity funds have publicly committed to sustainability standards such as the UN PRI
- 54% of limited partners have divested from private equity firms with poor ESG performance in the last year
- 78% of private equity investors regard ESG performance as a differentiator in deal sourcing
- 68% of private equity funds have experienced pressure from LPs to improve ESG disclosures in 2023
Regulatory and Investor Demand for ESG Interpretation
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