On 14 June 2018, LuxFLAG organised a breakfast seminar hosted by Degroof Petercam. We were pleased to welcome Claus Mansfeldt and Holger Emmel (SwanCap) as well as Nicolas Hentgen (Manor Group) as speakers. Sachin Vankalas, Director of Operations and Sustainability at LuxFLAG, moderated the session which discussed how ESG (Environmental, Social, Governance) factors can be implemented in the private equity industry. Around 45 participants attended the event.

In general, it was noted that ESG behaviour is not new to private equity but challenges remain in establishing a common definition. The panelists agreed that there is a need for standards to measure and report through well-defined KPIs. However, it was acknowledged that quantifying all the impacts one has is a difficult task. As investors don't want to be involved with compromising incidents, reputational ESG risk analyses are fundamental in the investment process and beyond. The quantification of environmental impact and an in-depth check of supply chains is already a fundament part for some practitionners. Sustainability aspects are becoming part of key risk exposures in private equity deals.  There is a growing trend towards sustainability, with an increasing number of private equity investors investing in and engaging with sustainable companies.