BCG Releases 2024 Sustainability in Private Equity Report

Written By Ava Morisi

Overview:

Boston Consulting Group's (BCG) latest report reveals that 85% of investors plan to prioritize sustainability in the next three years, driving private equity firms to accelerate their net-zero efforts.

Investor Focus on Sustainability

According to BCG's second annual Sustainability in Private Equity report, 85% of limited partners (LPs) intend to increase their focus on sustainability-related topics. This growing emphasis is pushing both general partners (GPs) and portfolio companies to adopt stronger sustainability frameworks.

Private Equity’s Response

The heightened expectations from investors have led private equity firms to prioritize ESG goals more than ever before. While only 22% of PE-owned companies currently have a decarbonization strategy, those that do are making faster progress in reducing emissions compared to public companies.

Impact on Portfolio Companies

The report highlights that 70% of LPs believe companies that thoughtfully manage sustainability considerations deserve a valuation premium. This investor pressure is driving portfolio companies to integrate sustainability into their core operations and strategies.

BCG's report underscores the significant shift towards sustainability in the private equity sector, driven by investor demand. By prioritizing ESG goals, private equity firms and their portfolio companies are making strides towards achieving net-zero targets and contributing to a more sustainable future.

Read the full report here:

https://www.bcg.com/publications/2024/evolution-of-sustainability-in-the-private-market-report

Ava Morisi
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