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ESG in Alternatives

ESG in private markets continues to embed – but advances in tracking and monitoring will be key to evidencing impact

Watch the trailer for our latest ESG report

How much are private capital asset classes committing to ESG? How is the alternative assets industry faring with adoption, implementation and action on ESG practices? And how does this look across asset classes?

Watch the trailer for our latest ESG in Alternatives report: the transparency tipping point, to find out.

Positive impact funds are growing – with venture capital leading the charge

Globally, 232 impact funds have reached final closed, with over 160 currently raising. Of these, venture capital funds make up the largest portion of any asset class, with most based in North America. Meanwhile, the broader ESG agenda is bedding in across private asset classes in Europe, with managers in the region showing the greatest levels of transparency around policies and procedures adopted.

Across APAC, disparate levels of adoption drives complexity when it comes to evolving national regulatory frameworks between markets. But one thing is clear – managers, globally, are feeling the pressure from investors.

Asset classes vary on ESG commitment

Infrastructure boasts the highest share of AUM within ESG-committed funds, at 64%; with private debt close behind at 59%. This is partly down to the asset class being relatively young, and its growth contemporary with increasing attention on ESG.

At the other end of the risk spectrum, private equity has the highest overall value of AUM in ESG-committed funds at $2.3tn, but the lowest share of total AUM of any asset class, at 34%.
REPORT

ESG in Alternatives: The Transparency Tipping Point

As private markets catch up with their public peers, the appetite for ESG data and insights across alternatives is greater than ever. But modelling risks and establishing comparable metrics within private markets brings its own challenges – and pragmatism and context are essential for anticipating the exposure of industries to ESG risks.

In our latest Insights+ report, we dig into the key trends and topics for ESG across the industry, globally, and dig into what’s next.

Our full suite of ESG Solutions

We aim to make sure every decision taken in alternative markets is a sustainable one. With this in mind, we’ve built ESG Solutions to give you the data and insights you need to integrate ESG into your decision-making.

Building on in-depth ESG KPIs and disclosures for LPs and GPs, we’ve extended our ESG Solutions product with ESG Risk Analytics and Impact Potential. These additions improve your visibility of fund- and asset- level risk with 147,000+ private company Risk Exposure Estimate Scores, and help you uncover opportunities across labeled and unlabeled impact assets with Impact Potential.

ESG in Alternatives 2022: Webinar

Approaches to ESG practices across private markets are evolving. But alongside growing expectations from investors, the overheads associated with this shift could create an uneven playing field for smaller versus larger GPs. Join our upcoming webinar, where Andrea Ramirez, Preqin's AVP, Head of ESG Client Strategy, as she sits down with industry experts Maria Teresa Zappia of Schroders Capital, and David York from Top Tier Capital Partners, to discuss the global perspective on key factors shifting the needle for ESG in alternatives.

Preqin Roundtable: ESG & the Middle Market

Investment firms are increasingly finding that LPs expect them to have ESG policies in place with clear, measurable KPIs to track progress. But implementing ESG can seem daunting for middle-market firms just starting out on their ESG journey. In this roundtable, an all-women panel of four industry experts share their top tips and define a roadmap for success, from setting KPIs to tackling challenges along the way.

ESG needs dedicated people. Meet some of ours.

Preqin is on a mission to pioneer ESG data and research in alternatives, bringing transparency to an opaque market. Our teams are central to the company’s growth plans as the demand for high quality ESG data is top of mind for alternatives professionals.

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