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ESG Makes Inroads into Private Markets

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Investing with environmental, social, and governance goals is quickly climbing in private markets. 

Asset managers committed to ESG investing now oversee an aggregate $3.1 trillion, or 36 percent of the value of total global private market assets, as of October, according to a Preqin report released Wednesday. Notably, 49 percent of private debt strategies are dedicated to ESG, the highest proportion of any alternative asset class. The private debt figure is striking, given that managers of public fixed income strategies have been far slower to adopt ESG objectives than those who oversee listed stocks.

At the same time, ESG-committed managers brought in only 43 percent of the $950 billion raised so far in 2021. 

The research firm also noted that managers and allocators still struggle to integrate ESG metrics and goals into all of their investments. 

For private capital to be effective in the ESG space,…

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