Dave Stangis, chief sustainability officer at Apollo Global Management, reflects on the past year and looks forward to 2023.
Looking back at 2022, what pivotal events, moments or developments in terms of sustainability in private markets stood out to you?
There are a few things that stood out to me, but I will focus on two I believe were a critical turning point in the sector: the investment in sustainability talent and capabilities, and the work to streamline ESG data collection and reporting.
We’ve seen a rise in the demand for sustainability talent within private markets, and asset managers have focused on bolstering their sustainability/ESG capabilities. Here at Apollo, in the last year we’ve appointed heads of ESG for both private equity and credit, hired a climate strategy lead, and the number of dedicated sustainability professionals have grown.
With ESG performance data being spread out across various reporting frameworks, access to consistent ESG metrics remains a challenge. This past year, we’ve seen GPs, LPs, and industry associations collaborate to create greater transparency and standardization of ESG disclosure.
Has the private funds industry made progress on climate in the last year? Where are the bright spots? Where has it disappointed?
There’s been significant progress. Recent data from the ESG Data Convergence Initiative shows that an increasing number of private fund managers are measuring ESG indicators at the portfolio company level and tracking progress over time. The ability of private fund managers to help drive change at portfolio companies can result in improved ESG performance.
Looking ahead to 2023, what is your firm’s next priority in terms of the climate? What would you like to have completed over the next 12 months?
Our priorities at Apollo are clear. Last year, we launched our Sustainable Investing Platform, with the target of deploying $50 billion in clean energy and climate capital by 2027. As an organization, we view sustainability as a theme that permeates all aspects of our business. In addition, we have plans to enhance reporting on climate across Apollo-managed funds’ portfolio companies, deepen our alignment with TCFD recommendations in our annual reporting, and continue to work across the firm and with our shareholders and LPs as we build more capability to measure, manage and report on climate-related risks and opportunities.
Aside from climate, which other areas of sustainability will be prominent on your agenda and why?
At Apollo, we see sustainability as a key enabler of the firm’s growth strategy. We have several priority areas that will be prominent on our 2023 agenda: continuing to drive rigour around internal management system processes and training; placing a high priority on people and social impact topics, including supplier and board diversity, corporate citizenship, and talent development within Apollo and portfolio companies; continuing to focus on enhancing voluntary disclosure and reporting; and leveraging our proactive approach to stakeholder engagement to help identify trends and future expectations in the field.
How are more emerging topics like nature/biodiversity occupying your time and resources?
The sustainability function considers broad topics across the natural capital and human capital landscape in our day-to-day. In the last year, we’ve made strong progress in building talent and aligning strategically with our investment teams. We’ve also added some additional operational expertise to the team in 2022. Carletta Ooton, head of ESG for private equity, and I have extensive experience working across broad areas of nature, biodiversity, complex supply chains and product life cycles in many different sectors. We will continue to monitor both the investment and regulatory landscape with respect to these topics and work to position Apollo for the future.
Dave Stangis was appointed chief sustainability officer at Apollo in October 2021.