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The views expressed are those of the authors at the time of writing. Other teams may hold different views and make different investment decisions. The value of your investment may become worth more or less than at the time of original investment. While any third-party data used is considered reliable, its accuracy is not guaranteed. For professional, institutional, or accredited investors only.
Environmental, social, and governance (ESG) factors are critical business issues for public and private companies alike. In our view, understanding and incorporating material ESG factors as early as possible enables more informed and strategic business decisions (Figure 1). Yet less than half of private company boards assess ESG-related risks and opportunities.1 We therefore believe it is essential to work with our portfolio companies to proactively tackle their distinct ESG issues.
Importantly, many private companies are well positioned to address ESG factors, as they’re already tracking relevant metrics and working toward improving specific issues. We hope our insights as public and private market investors can help our portfolio companies leverage that work and adapt to growing ESG expectations — so they can remain focused on their core businesses.
We believe ESG matters in private markets for the same reasons it matters in public markets. In our view, strong ESG practices can potentially help private companies:
When companies go public today, there’s much greater scrutiny of their ESG practices than ever before. Yet just 20% of companies say they are “very ready” to talk to investors about ESG issues.4 In our view, the earlier boards and management teams start to think about and address the ESG factors that are material to their businesses, the better.
The market often refers to ESG as being one thing, but in reality, there are many different factors that fall under the ESG umbrella. For instance: How is a company positioned to mitigate climate-related risks? Does it monitor working conditions across its supply chains? How does it look to build a diverse, inclusive, and equitable workforce, and how does its culture help…
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1Source: National Association of Corporate Directors, 2022 Private Company Board Practices and Oversight Survey. | 2Source: GreenPrint, Business of Sustainability Index, June 2022. | 3Source: ISS Governance Analytics, data for Russell 3000 companies compares January to June 2021 and January to June 2022. | 4Source: “The Purpose Action Gap: The Business Imperative of ESG,” Barkley & Jefferies, July 2021.
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Global Industry Analyst Matt Ross and Portfolio Manager Matt Lipton explore the role of ESG in fintech in this clip from their WellSaid podcast episode.
2023 Insurance Outlook: Resolve to solve with a restocked toolkit
Multi-Asset Strategist Tim Antonelli and Insurance Strategist Max Davies share four actionable ideas designed to help insurers successfully navigate 2023.
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We discuss why effective people management is critical for private companies and outline four strategic focus areas that can help companies navigate evolving employee needs, regulatory changes, and investor expectations.
Five key ESG topics for private companies in 2023
Our ESG for Private Investments Team explores five critical ESG topics for private companies in the year ahead.
Private equity outlook: Why we see a buyers’ market ahead
Co-Head of Private Investments Michael Carmen shares his outlook for the private equity market, highlighting today's normalizing multiples, continued innovation, and, in a number of cases, fewer competitors for the most attractive deals.
Fintech market overview: The intersection of disruption and dispersion
In the latest episode of WellSaid, Portfolio Manager Matt Lipton and Global Industry Analyst Matt Ross join host Thomas Mucha to discuss their outlook for fintech in today's environment, exploring the recent pullback in the sector, disruptive fintech innovations, potential regulation, and much more.
Measuring impact in venture capital
We highlight why venture capital matters to impact investors and how to authentically measure and manage impact in this asset class.