An anti-ESG backlash in some US states has created challenges for private markets managers but there are few signs of ESG moving down the priority list elsewhere.
In private markets climate investing, as with other impact investing themes, capital has gravitated primarily towards equity strategies. This is about to change.
Nearly half of private credit managers had included one in a deal when surveyed last year, said Sarah Miller, senior vice-president at the investment consulting firm, in a video interview at the Impact Investor Global Summit.
The Pension Insurance Corporation, which has 16% of its NAV invested in private credit, is seeing ESG elements creeping into loan terms, but a tweak to insurance regulation would make smooth the way for more.
There is a 'brown discount' that needs to be applied to real estate assets that are not on the right path to net zero, says Schroders Capital's global head of real estate.