Deep Dive: How ESG becomes the CFO’s concern

We spoke to 13 CFOs, three ESG chiefs and six limited partners to explore how ESG will become part of the finance chief's remit.

Deep Dive: For this month’s cover story, we spoke to 13 CFOs, three ESG chiefs and six limited partners about ESG frameworks.

It was striking just how vague and varied approaches still are. The lack of standardization (how many times have we used that phrase in connection with PE?) means the ESG bar that a GP needs to clear to raise institutional capital is essentially still non-existent. Even the most ESG-minded fund investor will forgive the lack of an ESG policy if the GP pledges to change over time.

But while the investor community remains flexible on the ESG front, there are other forces – as we explore in the story – that will bring data-driven ESG reporting to the fore. Data that flow from the portfolio company to the GP and then on to the investor will in the future be more than just financial KPIs. Forward-thinking CFOs are already doing something about it.

LPs on fund restructurings: Elsewhere, we bring you another snapshot from our LP Perspectives survey report (now available in full to subscribers of sister publication Private Equity International). A significant percentage of LPs that have been party to a GP-led restructuring say that although they were given enough information and time to make a decision on whether to participate, they were not happy with the way costs were divided between the GPs and funds.

Email prepared by Graham Bippart and Toby Mitchenall.