More than ever before, private equity firms are focused on aligning their investment strategies with Environmental, Social and Governance (ESG) goals. Limited partners are increasingly investing through an ESG lens, and in recent weeks, there has been an unprecedented spate of high-profile, high-level hires of ESG pros by PE firms. The number of companies becoming signatories to the United Nations’ Principles for Responsible Investment has soared in 2021. In keeping with our long tradition of recognizing the best in private equity, Mergers & Acquisitions today announced our inaugural 2021 PE Innovators in ESG.

You’ll see a mix of entities on the list, including several of the largest PE firms as well as many mid-market firms, plus a couple of limited partners and one industry organization. All are leaders that are pioneering the new emphasis on ESG and also forging a new level of accountability, including standardizing on data collection and reporting.

Today’s activity is just the tip of the (melting) iceberg. We expect to see the focus on ESG intensify, expanding into the full life cycle of deals. Next year, new tools to evaluate potential portfolio company investments in the due diligence stage will be unveiled. In the meantime, look to the 18 entities we honored today for role models as you chart your ESG course. And join us on Dec. 1 for our virtual event, PE Innovators in ESG Speak.

–  Mary Kathleen Flynn