Align your fund sourcing and fundraising with your sustainability goals through enhanced ESG disclosures
The alternative asset industry’s #1 source of ESG governance data at the investor and fund manager level is undergoing a significant expansion. Understanding investor and fund manager sustainability practices is now easier than ever – drawing from leading private market ESG disclosure frameworks, including PRI and ILPA DDQs. We're thrilled to announce the addition of more than 40 new management indicators of ESG disclosures, making it a total of 76 indicators for fund managers and 53 for investors.
What are ESG management indicators?
ESG management indicators are a set of policies and practices, tracked across fund managers and investors, that gauge how well sustainability is managed by an organization and its investments. They are a quantitative measure of the level of disclosure on ESG governance, derived from private market best practices and leading ESG disclosure frameworks. Management indicators cover all ESG policies, management practices, and any rules of doing business that have been disclosed and updated within the past two years.
With this update to Preqin ESG Solutions, we’ve increased the number of management indicators from 37 to 76 for GPs and 12 to 53 for LPs.
Refer to the appendix for the detailed list of all management indicators.
Preqin’s ESG management indicators sit under LP, GP, fund, and asset profiles – enabling you to quantify, visualize, and compare the key aspects of ESG management across investors and fund managers active in the alternative assets industry. The extent to which ESG is integrated into the business management practices of LPs and GPs varies in its scope, depth, implementation, and transparency. We want to give our clients a way to meaningfully compare ESG practices disclosed by firms operating in opaque private markets.
If you are an asset manager, you can use the LP, GP, fund, and asset profiles to identify potential investors, create targeted fundraising campaigns, gather intel on your competitors, and benchmark yourself against the market. Similarly, if you are an asset owner, you can easily understand the developments in asset managers’ ESG strategies, find funds that match your desired profile, inform your due diligence process, and improve stewardship.
What information do the updated management indicators include?
Updates to GP-level data
GP profiles (37 -> 76 indicators) – We are expanding GP ESG profiles to include KPIs that help you seamlessly conduct fund sourcing, external manager sourcing, and due diligence across key areas, including:
Diversity, equity, and inclusion (DEI)
GHG emissions
Internal operations (policies and training)
Investment strategy (due diligence and stewardship)
Fund profiles – Connect the GP management indicators to their underlying funds to understand how ESG is embedded into their investment policies and practices (excluding any pertaining to real estate and infrastructure)
Asset profiles – Understand how GPs manage their assets with disclosures that demonstrate the level of ESG integration across their portfolio management strategy (excluding any pertaining to real estate and infrastructure)
2. Updates to LP-level data
LP profiles (12 ->53 indicators) – Bolster your fundraising with even more information about the sustainability commitments and preferences of LPs. We are expanding investor ESG management indicators to help fund manager pitches with detailed disclosure info on:
Diversity, equity, and inclusion (DEI)
GHG emissions
Internal operations (policies and training)
Investment strategy (due diligence and stewardship)
Refer to the appendix for the detailed list of all management indicators.
Disclosure trends across the ESG industry have been evolving since the initial release of ESG management indicators (previously known as transparency KPIs). Investors and fund managers have joined new sustainability associations that require different criteria to be considered for membership – we wanted to update our disclosure data to reflect what’s happening in the ESG industry.
ESG frameworks have evolved to include more granular indicators, and with this update we not only included this new information, but we also added a new ESG framework (SFDR) as well.
We believe that ESG is no longer simply an added bonus, but a critical element of your overall strategy. This is supported by an increasing appetite for up-to-date, comprehensive ESG data in the market.
Benefits to LPs, GPs, and SPs
LPs can use management indicators to integrate ESG into their fund sourcing, external manager sourcing, and early due diligence workflows – especially when trying to understand how these insights align to common due diligence frameworks. They are able to identify fund managers with an ESG-integrated investment workflow or highlight sustainability policies that are potentially insufficient, leveraging ESG risk analytics to understand if a manager’s ESG-related risk exposure aligns with stated policies or commitments.
GPs can use management indicators to integrate ESG into their fundraising activities with more information about the investors’ sustainability preferences. This enables them to align their research and outreach, as well as pinpoint areas of ESG governance where they might be weaker than their competitors.
SPs can use management indicators to access an up-to-date and comprehensive view of the market with standardized, comparable ESG data for trending ESG commitments and disclosures – saving them valuable time and resources as part of their market analysis and business development workflows.
By leveraging established ESG frameworks and standards, Preqin has curated a set of core ESG data points, specifically applicable to private markets. The indicators were sourced from the following frameworks:
The Sustainability Accounting Standards Board (SASB)
The Principles for Responsible Investing (PRI)
The Task Force on Climate-related Financial Disclosures (TCFD)
Institutional Limited Partners Association (ILPA)
Public market ESG rating providers
NEW! The Sustainable Finance Disclosure Regulation (SFDR)
Each indicator has been categorized according to the following tags:
Governance Type: Tags indicating whether the indicator is primarily related to manager governance, investment integration, or portfolio management
ESG Pillar: Tags indicating whether the indicator is primarily related to environmental, social, or governance pillars
ESG Theme: Tags indicating the SASB material issue or theme, as well as themes specific to private markets
ESG Source Framework: Tags pointing to the frameworks from which the indicator is sourced
The rationale behind this expansion is to enhance our understanding of ESG practices by expanding on the methodology of the existing indicators. Maintaining consistency ensures that our approach resonates well with the market, as alignment with frameworks proved a key factor in the data's utility. Additionally, the updated list of indicators incorporates new source frameworks like SFDR and mapping to ILPA and PRI's DDQs, reflecting market developments since the launch of Preqin ESG Solutions and providing users with more informed decision-making capabilities.
If you need more help understanding how to make the most of the expanded ESG Management Indicators, please speak to your account manager.
If you do not currently have access to our Preqin ESG Solutions, you can schedule a demo with an expert today.
Appendix
List of ESG GP management indicators (76):
DEI
DEI policy or initiative
Tracks employee diversity
Family Leave policy
DEI policy or initiative for portfolio companies/assets
DEI due diligence reporting lines
Gender
Breakdown of pay details
Breakdown of pay details at the portfolio company/asset-level
Gender breakdown of the board of directors
Gender breakdown of the executive committee
Gender breakdown of the senior management
Gender breakdown of the wider company
Gender breakdown of the executive committee or senior management at the portfolio company/asset-level
Gender breakdown of the wider company at the portfolio company/asset-level
EMISSIONS
GHG Emissions
GHG emissions: Scope 1
GHG emissions: Scope 2
GHG emissions: Scope 3
GHG intensity of portfolio companies/assets
Emissions targets
GHG emissions of portfolio companies/assets
GHG emissions: Scope 1 of portfolio companies/assets
GHG emissions: Scope 2 of portfolio companies/assets
GHG emissions: Scope 3 of portfolio companies/assets
Emissions targets for portfolio companies/assets
INTERNAL OPERATIONS
Adherence to any ISO standards
Dedicated sustainability report
Spending on political donations and/or lobbying expenditures
Board of directors
Governing, leadership, or executive bodies, including the board of directors
List of investors by type
Ownership structure of the firm
Registered investment advisor or a registered broker dealer status
Statements, policies, or initiatives related to climate change
Adopts a green building or energy management standard
Any mention of ESG consideration in operations
Waste generation metrics
Employee engagement surveys
ESG integration within performance reviews and/or compensation mechanisms
Policies
Code of conduct
Insider trading policy
Anti-money laundering and/or "know your client" (AML KYC) policy
Whistleblower or anonymous incident reporting process
Political donations and/or lobbying expenditure policy
Privacy policy
Sustainable supply chain framework
Modern slavery or human rights policy
Training
Employee training hours
Management training
Training for investment professionals on ESG risks and opportunities in investment activities
DEI training
Code of Business Ethics training
Development or training programs
Anti-money laundering and terrorist financing training
Employee training on data security or privacy
INVESTMENT STRATEGY
Any mention of ESG consideration in investing
Dedicated ESG investment policy
Dedicated ESG investment staff
ESG due diligence reporting lines
Investments in portfolio companies/assets explicitly aligned with the UN Sustainable Development Goals
Total AUM as subject to ESG criteria or policies
Breakdown of energy efficiency for real estate assets
ESG commitments included in fund documents
ESG considerations included in deal documentation
ESG risks and opportunities included on Limited Partners Advisory Committee and Annual Investor Meeting Agenda
Due diligence
Environmental impact studies conducted on portfolio companies/assets
List of exclusionary screening factors
Policy specifying how ESG factors are used after investing in portfolio companies/assets, or in company exits
Policy specifying how ESG factors are used before investing in portfolio companies/assets
Social impact studies conducted on portfolio companies/assets
Stewardship
Engagement process or considerations specifically focused on ESG issues with portfolio companies/assets
ESG educational programs designed and run for portfolio companies/assets
Policy detailing engagement processes with portfolio companies/assets
Share of portfolio companies/assets where engagements were conducted on ESG policies or issues
Code of conduct for portfolio companies/assets
Reporting or monitoring portfolio companies/assets using ESG KPIs
Employee engagement surveys for portfolio companies/assets
List of ESG LP management indicators (53):
DEI
DEI policy or initiative
Tracks employee diversity
Family Leave policy
DEI due diligence reporting lines
Gender
Gender breakdown of the board of directors
Gender breakdown of the executive committee
Gender breakdown of the senior management
Gender breakdown of the wider company at the portfolio company/asset-level
Gender breakdown of the wider company
EMISSIONS
GHG Emissions
GHG emissions: Scope 1
GHG emissions: Scope 2
GHG emissions: Scope 3
GHG intensity of portfolio companies/assets
Emissions targets
GHG emissions of portfolio companies/assets
GHG emissions: Scope 1 of portfolio companies/assets
GHG emissions: Scope 2 of portfolio companies/assets
GHG emissions: Scope 3 of portfolio companies/assets
INTERNAL OPERATIONS
Adherence to any ISO standards
Dedicated sustainability report
Spending on political donations and/or lobbying expenditures
Board of directors
Governing, leadership, or executive bodies, including the board of directors
Ownership structure of the firm
Statements, policies, or initiatives related to climate change
Adopts a green building or energy management standard
Any mention of ESG consideration in operations
Waste generation metrics
Employee engagement surveys
Policies
Code of conduct
Insider trading policy
Anti-money laundering and/or "know your client" (AML KYC) policy
Whistleblower or anonymous incident reporting process
Political donations and/or lobbying expenditure policy
Privacy policy
Sustainable supply chain framework
Modern slavery or human rights policy
Training
Employee training hours
Management training
Training for investment professionals on ESG risks and opportunities in investment activities
DEI training
Code of Business Ethics training
Development or training programs
Anti-money laundering and terrorist financing training
Employee training on data security or privacy
INVESTMENT STRATEGY
Any mention of ESG consideration in investing
Dedicated ESG investment policy
Dedicated ESG investment staff
ESG due diligence reporting lines
Investments in portfolio companies/assets explicitly aligned with the UN Sustainable Development Goals
Total AUM as subject to ESG criteria or policies
Due diligence
List of exclusionary screening factors
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