Less than a quarter of private markets firms listed in an ESG transparency index align their reporting with the guidelines set by the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD), according to a report from sustainability consultants ITPEnergised and Orbis Advisory.
In its second annual edition, the ESG Transparency: A Private Equity and Venture Capital Index found that many private equity and venture capital firms are moving slowly to adopt industry standards for ESG disclosures, according to a statement from the report’s authors.
The consultants assessed the efforts of nearly 300 firms on the implementation of ESG processes and management strategies. Firms included in the index manage between £200 million ($260 million; €240 million) and £50 billion in assets.
While it was “apparent” that many of the 155 private equity firms that were reviewed are making progress towards bolstering ESG disclosures, only one-third of firms have considered publicly reporting diversity and inclusion initiatives, the statement said.
Below are the index’s 10 best performers:
- Arcus Infrastructure Partners
- Partners Group
- Tikehau Capital
- AnaCap Financial Partners
- Earth Capital
- Three Hills Capital Partners
VC firms, included in the index for the first time, are moving even slower towards ESG adoption, the consultants found. However, a growing number of managers are beginning to view sustainability strategies as a performance enhancer that can add value to early-stage investments.
The index reported 11 venture firms with “equal top ranking” for criteria including public disclosure of ESG commitments, management processes, and in-house sustainability measures, as well as alignment with industry frameworks.
The top-performing venture firms are listed below:
- Molten Ventures
- Scottish Equity Partners
- Balderton Capital
- Vickers Venture Partners
- Oakley Capital
- Cambridge Innovation Capital
- Oxford University Innovation
- Equinor Ventures
- Frog Capital