ESG or nothing: The sustainable finance transformation in private markets

New data from PwC Luxembourg suggests the majority of Limited Partners (LPs) and General Partners (GPs) are shifting towards an "ESG or nothing" investment philosophy, with over three quarters planning to cease investing in or promoting non-ESG private market (PM) products by the end of 2025.

The data comes from a new report titled: GPs’ Global ESG Strategies: Disclosure Standards, Data Requirements & Strategic Options available here which represents the fourth installment of PwC’s European Sustainable Finance Series which showcases the impact of regulation driving ESG uptake across the European Union, the United Kingdom, the United States, and the Asia-Pacific Region. The findings are based on a wide range of primary data gathered through a survey of 300 GPs and 300 LPs across all four jurisdictions.

ESG represents an unyielding focal point of the global PM landscape, and the importance varies by regions around the globe, but according to the data, both LPs and GPs are recognizing the importance of redirecting private capital towards sustainable objectives as a crucial aspect of generating value and bringing about a green transformation of the economy.

The key findings from the report include:

By analyzing LP and GP expectations and views as it pertains to ESG regulation across the US, UK, EU, and APAC, taking into consideration the asset class specificities, this new report provides a global overview of the ESG wave that is sweeping across the Private Markets which is redefining the financial, regulatory and investor landscape.