Against a backdrop of growing investor interest in responsible investment, Scandinavian-focused firm Nordic Capital has hired Karin Lepasoon as director of communications for ESG and HR and Emma Brandt as an ESG manager.
Lepasoon is a former executive with Skanska, a construction company based in Sweden. Brandt was previously a business controller focused on sustainability with global fashion retailer H&M. Before that she was a consultant with Big Four accounting firm Deloitte.
The appointments come as Swedish GPs gear up to formally launch industry guidelines on greater transparency. This month, the Swedish Venture Capital & Private Equity Association (SVCA) will formally publish a Code of Conduct that will evaluate private equity’s role in society.
The Code will assess whether private equity firms are behaving in a way you can expect from a professional owner, Gabriel Urwitz, managing partner at Segulah and chairman of the SVCA, said earlier this month.
At a more global level, other firms that have hired in-house ESG staff include Kohlberg Kravis Roberts, CDC and Adveq.
The hires will play well with EU-based investors who are increasingly voicing a preference for managers that incorporate an ESG policy into their investment thesis. While the trend is less vibrant in the US, where most private equity fundraising occurs, it’s becoming a more popular item on US investors’ due diligence questionnaires used for fund manager selection.
Fund managers that have hired in-house ESG specialists point to a few inherent advantages in the strategy, including the ability to make internal improvements quickly and spearhead ESG-related initiatives with force.
Adam Black, head of sustainable development at UK private equity firm Doughty Hanson, said in a past interview that a full-time ESG employee is best placed to communicate the logic and appeal of responsible investment to colleagues during investment committee meetings and water cooler chats.
Sources say an in-house ESG guru can also lend a certain kind of credibility to a firm’s message on responsible investment, and can serve as the point person in answering investors’ ESG-related enquires.
Cost has been the primary deterrent to more firms recruiting dedicated ESG staff, sources tell pfm, who note that third party consultants who can be hired on an ad-hoc basis for responsible investment work can be a more affordable option. One GP speaking to pfm said that ESG was not yet big enough an issue to “make or break” a LP’s commitment.