One-third of private capital assets globally is now managed using non-financial goals, such as climate and diversity, according to alternative asset data provider Prequin. The report found that 49% of private debt strategies are ESG-focused, and 36% of total global private market assets are now managed by investors committed to ESG.
The report notes that the ESG increase amongst private debt is remarkable, as private markets have been significantly slower in adopting ESG objectives than public markets.
Despite progress, managers still struggle to incorporate ESG metrics into investments. A lack of unified definitions and standards is also a concern.
Large asset managers disclose more ESG information. The report found that low disclosures do not necessarily equate to lax ESG practices but a lack of resources, such as data and time.