Decoding ESG for GPs: LP Insights
by Andrés Ramos, Content Marketing Specialist – Nasdaq Private Fund Solutions
ESG insights from LP investors
Nasdaq Private Fund Solutions recently hosted a virtual event which featured several content sessions designed to help LPs and GPs navigate the complexities of today’s private markets. For the keynote panel of the event, Nasdaq’s head of Private Fund Solutions, Katey Bogue spoke with institutional investors Philippe Belanger from Desjardins Group and Kasper Wichmann from Nykredit Asset Management about ESG.
In the session, titled Decoding ESG, the LP panelists discussed what they want to see from GPs when it comes to ESG policies and principles and how GPs can use their investors as resources when it comes to building out their ESG knowledge and capabilities.
Here is a key takeaway from the panel for GPs just starting to focus on ESG:
Having a low staring point is not an issue for investors
The panelists emphasized that investing with GPs who have a low starting point with regards to their ESG capabilities and knowledge was not problem and that they are willing to work with fund managers who want to learn and grow. Sincerity is also key, GPs should increase their focus on ESG because they believe in its merits, not simply because it’s what LPs want.
When it comes to learning more about ESG and building out their internal capabilities in the space, fund managers should be using their LPACs as resources, as well as the ILPA ESG Assessment Framework.
External consultants can also be helpful for helping launch the ESG function with a GP, but both panelists emphasized that eventually ESG should be anchored internally to help build credibility. Additionally, the placement of the ESG function within a fund manager’s organization is important. The role should sit within the investment committee, this signals to LPs that ESG is part of the diligence and investment process and not simply part of marketing or investor relations efforts.
Watch the on-demand panel replay for all the insights
Request a replay of the panel to hear the panelists share their insights on the following ESG topics:
- What ESG is in practice to institutional investors and what it is not.
- Advice for GPs making their first strides in ESG
- Steps fund managers can take to ensure they are not engaging in greenwashing and red flags they should avoid
- Insights on the various ESG frameworks and which ones GPs should leverage
- ESG metrics and reporting
