In order to appeal to and then keep hold of the best young private equity professionals firm’s need to take environmental, social and governance (ESG) issues seriously, according to Christian Sinding, partner at Nordic buyout firm EQT Partners.
In Baker & McKenzie’s latest private equity report, Sinding, said “it is important for [EQT] to act as good citizens to attract and retain the best young talent.” Adding that the younger generation pays more attention to shared values and corporate social responsibility (CSR).
Junior dealmakers speaking to PE Manager recently said they’re driven to create positive change, both at their portfolio companies and in the wider world. At the very least, many believe that it’s important to be seen to be responsible investors in the wake of the global financial crisis.
Sinding said it is not merely retaining junior talent that makes EQT a good corporate citizen; it is demanded of EQT by its investors. “Investors are not just interested in strong returns – a GP’s responsible investment track-record is almost equally important.”
A strong majority (80 percent) of fund managers believe LPs' interest in ESG issues will increase in the next two years, according to research from PwC. And 58 percent of LPs said they are taking a greater interest in ESG issues, according to a Malk Sustainability Partners survey.
Sinding adds that five to ten years ago, EQT received only “scattered” questions regarding CSR initiatives during fundraising.
“Now, every investor has questions about CSR; some even have hundreds in this important field. There has been an exponential growth in interest in CSR matters.”