“My boss tells us, ‘I want you guys to be the most fun team in the entire firm,’” said The Carlyle Group’s head of ESG and impact, EMEA and APAC, Katharina Neureiter. Her boss – Megan Starr, Carlyle’s head of impact – wants the firm’s sustainability team to be “everyone’s favourite phone call” and “invited to every offsite”, Neureiter later told New Private Markets.
Neureiter was discussing ways for ESG teams to engage the rest of the firm, speaking on a panel at BVCA’s summit earlier this month. While her comments had the audience chuckling, the implication is clear. It suggests that the role of an ESG team in a private equity house is seen as inherently boring or bothersome by other teams. ESG professionals must be fun individuals showing boundless enthusiasm to offset this and work more closely with their colleagues.
Few people in this industry would say ESG is not important – on the record, anyway – but you can see how a reputation for being bothersome could come about. As the head of responsible investment at a large LP recently told us: “The job spans everything, but you have command and control over nothing.”
Neureiter’s panel discussed how ESG can throw spanners into other teams’ works: for example, introducing new compliance obligations for fund marketing, blocking deals on sustainability grounds, chasing deal and portfolio management teams for difficult-to-obtain ESG data. If an ESG team’s remit covers in-house operations, it may even send you reminders about turning off the office lights and adding women to your candidate pool.
But a “boring” or “bothersome” reputation can make the necessary collaboration with other teams more challenging. Asked what can make ESG teams’ jobs more expedient and effective, Adam Black, head of ESG and sustainability at Coller Capital, a co-panellist with Neureiter, said: “It comes down to [building] rapport with your colleagues, and trust, and visibility of you as an ESG person… If you can facilitate those connections, [progress on ESG issues] starts to take on a life of its own. When ESG people get together with deal teams, I think it’s a beautiful thing.”
There are many ways to ease a “boring” or “bothersome” reputation. The Carlyle team’s strategy of participating in social events and showing “an insane amount of enthusiasm” works, Neureiter said on the panel. But fundamentally, reducing antipathy between different social groups is about removing social divisions and distinctions.
Perhaps the very fact of having a distinct ESG team and dedicated ESG professionals is part of the problem.