What PE can do today to meet tomorrow’s ESG demands

In this episode, our speakers call on PE to adopt ESG and buy in to a broader long-term value strategy.

Related topics Private equity Strategy

A company’s primary purpose is no longer simply enhancing and protecting value for shareholders through short-term profits, it is also delivering long-term value (LTV) to all stakeholders. Private equity (PE) has taken a keen interest in this expanded definition of value in the face of investor, employee and societal interest in conscious capitalism and ESG. The outdated “do no harm” mantra is rapidly being replaced with a business imperative to “do good.”

In this shift from shareholder to stakeholder capitalism, the biggest challenge is moving beyond public relations talking points and truly integrating ESG into an organization. Organizations that anchor themselves to a meaningful purpose are better positioned to benefit from, demonstrate and measure the value they create and reap both financial and non-financial rewards.

For PE, developing and executing against a compelling purpose-driven, stakeholder-focused strategy incorporates employee experience, customer value proposition, supply chain management, capital allocation decisions and leadership incentives.

ESG skeptics need only look at the facts to be convinced to act:

  • One in four investment dollars is now flowing into ESG funds: not only is that number growing exponentially, there is competition for those investment dollars.
  • There is a massive transfer of wealth occurring from boomers to millennials, who have very different values and expectations. 
  • There is frequently a lower cost of capital for companies with better ESG scores.
  • During the initial market selloff after the COVID-19 pandemic, funds that had an ESG focus experienced lower volatility and faster recovery than non-ESG funds.

PE firms starting their ESG journey can use the following framework:

  • Now – understand the core ESG issues that are important to your firm and your key stakeholders. 
  • Next – report transparently on ESG issues, metrics, goals, and management tactics. 
  • Beyond – leverage what you learned and gained by integrating ESG into your business and articulating how it creates LTV for you and your stakeholders.

For your convenience, full text transcript of this podcast is also available. Read the transcript.

Presenters

Eric Buchen
EY Global Long-term value Go-to-Market Lead
Curtis McLaughlin
Partner, Financial Accounting Advisory Services, Ernst & Young LLP
Winna Brown
EY Americas Financial Accounting Advisory Services Private Equity Leader

Podcast

Episode 18

Duration 30m 16s

In this series

series overview
(Event List - Manual)

What PE can do today to meet tomorrow’s ESG demands

In this episode, our speakers call on PE to adopt ESG and buy in to a broader long-term value strategy.
Podcast

Episode 18

Duration
30m 16s

Presenters

Eric Buchen

EY Global Long-term value Go-to-Market Lead

Curtis A McLaughlin

Partner, Financial Accounting Advisory Services, Ernst & Young LLP

What private equity needs to know about investing in APAC: Part II

In this episode, our speakers help investors understand how new regulations will impact the current and future private equity ecosystem in APAC.
Podcast

Episode 17

Duration
19m 04s

Presenters

Josh Lewsey

EY-Parthenon Partner, Strategy & Transactions, Ernst & Young Limited

John Levack

Vice Chairman, Hong Kong Venture Capital and Private Equity Association

What private equity needs to know about investing in APAC: Part I

In this episode, our speakers help private equity investors understand how to navigate and set expectations in the APAC market.
Podcast

Episode 16

Duration
27m 18s

Presenters

Josh Lewsey

EY-Parthenon Partner, Strategy & Transactions, Ernst & Young Limited

John Levack

Vice Chairman, Hong Kong Venture Capital and Private Equity Association

Why PE should remain bullish on healthcare deals

In this episode, our speakers explain why PE should remain optimistic about investing in the healthcare sector despite the short-term detriment of COVID-19.
Podcast

Episode 15

Duration
25m 00s

Presenters

Jeffrey M. Woods

EY-Parthenon US Co-Head of Health Care

Winna Brown

EY Americas Financial Accounting Advisory Services Private Equity Leader

Why PE must embed geostrategy to win in the market

In this episode, our speakers explore why PE must embed geostrategy in order to recognize unique opportunities and drive investment decisions.
Podcast

Episode 14

Duration
25m 17s

Presenters

Winna Brown

EY Americas Financial Accounting Advisory Services Private Equity Leader

How customer experience is driving digital transformation in PE

In this episode, our speakers explore how experience-led transformation is inspiring digitalization across the PE portfolio.
Podcast

Episode 13

Duration
25m 17s

Presenters

Sean Epstein

Senior Vice President and Global Head of SAP Private Equity & Mergers and Acquisition Programs

Winna Brown

EY Americas Financial Accounting Advisory Services Private Equity Leader

Why PE’s role in our economy and society is more important than ever

In this episode, our speakers explore the evolution of private equity and the role it will play in a post-COVID world.
Podcast

Episode 12

Duration
23m 00s

Presenters

Andres Saenz

EY Global Vice Chair – Industry Markets

Winna Brown

EY Americas Financial Accounting Advisory Services Private Equity Leader

How COVID-19 is transforming the PE operating model

In this episode, our speakers describe how COVID-19 is transforming operating models across the PE portfolio and beyond.
Podcast

Episode 11

Duration
29m 00s

Presenters

Tim Dutterer

EY-Parthenon Head of Private Equity

Gregory W. Schooley

EY-Parthenon US Value Creation Leader; Principal, Ernst & Young LLP