Steve Schwarzman, Blackstone
Steve Schwarzman, Blackstone

New Private Markets is out and about.

In San Fransisco Snehal Shah is at the Private Equity International Responsible Investment Forum today and tomorrow. In a the middle of a juicy day one agenda, Snehal will be interviewing San Francisco Employee Retirement System head of ESG and responsible investing Andrew Collins. If you are in the area drop Snehal a note on snehal.s@pei.group.

Meanwhile in Paris, Toby Mitchenall is at private equity conference IPEM, where sustainability is, if not the central theme, certainly one of the recurring pillars of discussion. In his opening keynote, Blackstone founder, chairman and co-CEO Steve Schwarzman identified the energy transition as an area of private markets that showed significant promise.

“Europeans are the leaders in talking about climate and energy investing,” said Schwarzman. “The fascinating circumstance is that there is actually not that much money going into those types of investments. With a lot of projects and a lot of need for money, there is the prospect of “very good rates of return”.

Pleasingly for champions of sustainability, the topic was deemed important enough for the main stage day one agenda. Some key takeaways from the discussion:

  • Within the “echo chamber” of sustainability it is easy to assume that everyone has agreed on what “ESG” is and how it differs from “impact”. Care is needed to be clear about definitions.
  • The political backlash in the US is not changing the way these (Europe-based) investors are deploying capital, but it is sharpening the way ESG is defined and communicated with US LPs. “It’s causing us to be very, very clear about what our principles actually are, and ensuring that we’re communicating those in very distinct terms,” said one GP.
  • The universe of ESG data available to limited partners has come on leaps and bounds, due to various initiatives; EDCI was singled out.
  • There are ways of showing clear connection between ESG initiatives and financial outcomes (energy efficiency is a prime example), and anecdotal evidence from intermediaries about buyer’s enhanced interest in assets with strong ESG credentials.