The UN-supported Principles for Responsible Investment (PRI) is forming a working group of private equity signatories to develop a guide on due diligence questions that LPs can ask GPs pre-investment.
The group’s LP DDQ Guide wants “to encourage a consistent industry approach towards LP due diligence on environmental, social and governance (ESG), and provide GP and LP case studies on integrating ESG considerations into the LP pre-investment process.”
Already the PRI has put together a workbook that contains practical guidance for private fund advisers wanting to better integrate ESG considerations into their dealmaking process. The workbook offers readers a step-by-step action plan to build from that begins with appointing an in-house ESG expert and ends with engaging LPs to better understand their ESG-related expectations.
However, there is still no standardized approach for LPs and GPs to request and disclose ESG-related information, according to a statement from the PRI. While the workbook “provides high-level guidance,” the PRI argues that the industry would benefit from “having more detailed guidance on disclosing ESG-related information accompanied with examples of good practice.”
LPs and GPs that would like to be part of the working group should contact Natasha Buckley at firstname.lastname@example.org with 100 to 200 words on how they can contribute. Deadline for submissions is February 13.