Private markets firms in North America lag behind their peers in Europe and emerging markets when it comes to ESG policies and practices, according to data from fund investor PineBridge Investments.
As part of its annual ESG survey, PineBridge received responses from 59 managers, predominantly in the mid-market, with which it has active relationships. Most of these managers (75 percent) run buyout strategies, with growth investors, VC, real estate and infrastructure investors also participating in smaller numbers. The survey was conducted in H1 2022.
One hundred percent of responding managers in Europe, Asia, Latin America and Africa reported having ESG policies in place, versus 80 percent in North America.
In a similar vein, 85 percent of European managers incorporate ESG metrics into their corporate reporting, versus just 47 percent in North America and 43 percent in Asia.
North American firms were among the leaders in terms of supporting diverse hiring and having policies and procedures in place relating to workplace behaviour. However, they lagged in terms of DE&I initiatives at the portfolio company level.
PineBridge said: “Our 2022 survey showed progress in several key areas. Critically, the share of managers surveyed who have committed to international standards that promote responsible investment practices increased in 2022, with 66 percent committed to the UN Principles for Responsible Investment (versus 49 percent in 2021), 12 percent committed to the Sustainability Accounting Standards Board (SASB) (up from 7 percent in 2021), and 10 percent signing on to the UN Global Compact (versus 3 percent in 2021). Thirty-six percent of respondents have committed to more than one international standard.