In recent years, Environmental, Social and Governance (ESG) factors have moved from a tick box exercise to the forefront in the minds of investors, corporations, and financial markets.
Sustainable investing is one tool investors can use to mitigate investment risks and access opportunities. Within each asset class, investors can take a myriad of approaches to invest sustainably – private markets can offer certain qualities that warrant further focus.
In this note, we consider the extent that those investors wishing to invest sustainably can do so via the private markets. We consider whether the differing nature of private markets, compared to public, make the application of a sustainable investment approach more or less achievable.
"Changes in government policies and public perception, along with technological advances, are already affecting investors and businesses, resulting in both risks and opportunities. We expect this to continue and, given the scale of climate risk, it is highly likely that governments around the world will be forced into more action. Managing a portfolio’s exposure to this risk will be essential to achieving good investment outcomes."