ILPA on driving progress in ESG

The Institutional Limited Partners Association developed an ESG roadmap to support members’ environmental, social and governance efforts, providing access to online resources and best practices in areas such as due diligence and communications. Initially published exclusively for ILPA’s member LPs in February 2020, the association recently took the decision to make the ESG roadmap publicly available like its D&I roadmap, which aims to help LPs and GPs advance diversity and inclusion in private equity.

ILPA recently made its ESG roadmap public; what was behind that decision?

ILPA’s ESG roadmap serves as a clearing house for best practices and resources that reflect the ongoing development and the evolution of successful ESG integration in limited partner organisations.

ILPA understood that public demand was high for applied examples of ESG integration in practice, and ESG has become a fundamental component of stewardship in private equity. In short, there was demand for the roadmap, and ILPA thought making it public was the right thing to do. Since making both the ESG and D&I roadmaps public, ILPA has received positive feedback on the utility of both.

What role do you see the roadmap playing as the industry’s focus on ESG grows?

ILPA expects interest in ESG to continue accelerating among LP and GP organisations, and the goal of the roadmap continues to be to help LPs navigate the different stages of ESG integration.

When undertaking any new initiative, the first few steps can sometimes be the hardest, and having a clear understanding of what success looks like can jump-start the process. The roadmap serves as a tool that helps LPs get started.

How else is ILPA and its members looking to drive progress in this area?

As ever, ILPA continues to grow our own understanding of the industry’s approach to ESG. ILPA regularly engages with LPs, GPs and other stakeholders to understand and define evolving best practices pertaining to ESG integration.

Beyond the roadmap, ILPA has several initiatives planned in 2021 to further define best practice and better equip LPs with the knowledge needed to effectively maintain ESG programmes. ILPA will continue to create and encourage opportunities for LPs to gather, network and share information around ESG and diversity, equity and inclusion.

What steps would you like to see taken to assist with ESG reporting and measurement going forward?

ILPA members and GPs alike find it challenging to comply with the myriad of evolving reporting frameworks and regulatory standards. Looking forward, ILPA will work across the industry to engage with and support the frameworks that provide the greatest value and benefit.

In addition, ILPA will identify areas where standardisation is lacking or requires improvement, with the aim of lowering costs and reducing friction that will enable the collection and utilisation of ESG data at scale.