Sustainable investment has grown enormously in the past few years. In the not too distant past, sustainable investment appeared to interest only a limited number of investors who had clear, strong views on the environment. Since then, the amount of money invested in 'sustainable' funds has increased significantly.
According to latest industry reports, managing sustainability is currently one of the top priorities for larger global funds; with a number of investment managers deciding to position themselves as the market leaders in sustainable investment.
A recent report published by PricewaterhouseCoopers entitled Private Equity Trend Report 2012 indicated that over 40% of funds surveyed are now placing a higher importance on sustainability2, covering key areas such as environmental, social and governance factors (ESG), which is an increase of 7% on the previous year.
The same report indicated that 42% of international funds have already conducted analysis of ESG risks in their portfolio, with 11% planning to do so in the not too distant future. In contrast, despite a large number of funds not yet viewing sustainability as a high priority with regards to fundraising and/or management of portfolio companies, time will tell whether we will continue to see a growing appetite across the industry towards a greater emphasis on sustainability.