ESG has become a strategic success and investment factor for private equity companies. Key performance indicators are essential in the planning and implementation of sustainability strategies in order to be able to act in a target-oriented manner. Our standardised ESG scorecard approach now enables private equity investors to focus on the critical value drivers in portfolio management. The scorecard is based on expert interviews, internal and external surveys, sustainability reports and regulatory requirements.
In the white paper "Maximising Value and Impact: Unleashing the Potential of ESG in Private Equity Portfolios with an ESG Scorecard" you will learn which KPIs are included in our scorecard and why they are of general importance. Depending on the diversity of the portfolio, sector-specific indicators can also be added to the core scorecard.
One thing is clear: the number of ESG regulations is increasing - and they affect every company in every industry. Many European directives and regulations are still being adapted and best practices have yet to be developed. Corporate management faces new tasks.
Maintaining an overview of the various ESG key figures
Many private equity firms, meanwhile, still lack an overview of the ESG metrics that must or can be reported. A recent KPMG study on ESG management and governance showed that only 56 percent of the companies surveyed have implemented appropriate and well-defined KPIs for the management of environmental aspects. KPIs for social or governance aspects are even less common. Accordingly, there is a great need to catch up.
Dr. Thimo Stoll
Partner, Deal Advisory, Strategy, Head of ESG Strategy & Value Creation
KPMG AG Wirtschaftsprüfungsgesellschaft
ESG metrics: A uniform standard is needed
Private equity funds are no less guided by benchmarks in their search for best practices than they are opting for home-grown ESG approaches. A common benchmark is both useful and necessary. The collection of ESG data is not only necessary for compliance reasons, but also to establish oneself as a preferred provider and investor at portfolio and fund level. For example, a portfolio company that operates sustainably and ethically can have a competitive advantage and be sold at a premium. Our experts explain further background and details in the white paper.
