Interestingly we see a transformative shift of institutional investors towards ESG investing in private markets, highlighting its rise, the demand for enhanced reporting, and the potential for a sustainable future.
According to a report published by PwC Luxembourg, titled ‘GPs’ Global ESG Strategies: Disclosure Standards, Data Requirements & Strategic Options‘, institutional investors are transforming their investment philosophy as they increasingly prioritise environmental, social and governance (ESG) considerations.
As the momentum behind ESG grows, most institutional investors plan to cease non-ESG private market investments by 2025.
Growing commitment to ESG
Institutional investors have shown a solid commitment to ESG. Most surveyed, expressed their intention to increase their private market ESG investments over the next two years. More than a third of these investors are targeting more than 20% increases. This growing trend indicates that institutional investors recognize the potential for ESG-focused investments to deliver sustainable returns while aligning with their values and expectations.
Long-term value is becoming more self-evident. While opportunities and challenges vary significantly from region to region and asset class to asset class, the key message remains: rethink the status quo and view your operations and license to exist through an ESG lens.
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