The concept of responsible investment (RI) is founded on the view that the effective management of environmental, social and governance (ESG) issues is not only the right thing to do, but is also fundamental in creating long-term value. Responsible investors believe that companies that are successful in avoiding ESG risks while capturing ESG opportunities will outperform over the longer term. Typical ESG risks encompass the following issues:
Our recent survey of private equity (PE) managers' attitude to RI indicated that management of ESG risks is the key driver for action.
Limited partner (LP) pressure on managers to demonstrate their `RI' credentials, particularly when fund raising, is growing. Many LPs have signed the United Nations supported Principles for Responsible Investment (UNPRI), which is driving their interest.
Countries are fast evolving their ESG regulatory frameworks owing to rise in dimate change and environmental risks, social challenges, and increasing cases of corruption.
A large number of managers are now focusing on `eco-efficiency', doing more with less, in managing investments. This approach has led to significant cost savings in the operations of investee companies.
We provide assistance to investment fund managers and their investee companies in identifying and managing ESG risks as well as opportunities throughout the investment lifecycle.
Our team can provide expert input to the creation and development of your Green Bond, ensuring that it fits with your overall sustainability strategy, help you define the objectives for the bond strategy, and ensure it meets the expectations of key stakeholders.
Our experienced Environmental Due Diligence team can help you develop an appropriate framework to ensure the underlying projects meet Green Bond standards and enable you to assess and report the impacts of your green projects post-investment.
Our team has worked with a large number of financial institutions, including PE funds, structured credit investment companies, international pension funds, non-banking financial companies (NBFCs) as well as banks on RI engagements. Our clients deal with a number of financial instruments such as traditional debt and equity and mixed financing instruments. We have identified how ESG assessment requirements differ across asset classes of debt and equity and accordingly offer customised solutions for ESG risk assessment and mitigation.
Partner and Leader, Sustainability and Responsible Business Advisory, PwC India
Tel: +91 124 330 6491
Director, PwC India