Your correspondent attended a regularly held symposium at London Business School focused on all things PE. The event was held under the Chatham House rule.
Unsurprisingly the world of business rarely changes irrespective of an ownership structure. Market volatility, investor fads, talent management are familiar of course, but what caught my eye was a weighty segment of the day devoted to ESG.
The academic perspective featured some LBS research that was illuminating.
The panel discussion which followed from PE practitioners reinforced these findings. For example, many PE firms now sign up to a series of ESG principles supported by the UN. Many investors require it (or similar) as a starting point for investment, not an afterthought.
What was surprising was that growth of ESG principles is dramatic in developing markets; at least partly because of competition for capital and partly because the cost of not doing so outweighs any initial cost of starting. The panel was also keen to stress that transparency is a hallmark of a quality organisation so having robust bench-marking and reporting is a key element in any ESG strategy. In addition, the panel identified that new generations of investors, fund managers and other stakeholders are hard wired to see ESG as a standard business practice.
What lessons would your correspondent draw for treasurers?
Well, as the finding from our own research programme, the Business of Treasury, makes clear, treasurers are stepping up to work with their colleagues on providing strategic direction to their organisations.
ESG is an essential element in this especially if seen through the lens of broader risk management.
So who better to take it onboard? No one can afford to ignore this elephant anymore!
Useful further reference is this article in the Treasurer which covers what your CFO should know about green finance.
