Co-host Responsible Investment Forum Responsible Investment 2020 New York 2020 February 2020 • privateequityinternational.com March 4-5 | Convene, 730 Third Avenue Effectively integrating ESG to create sustainable value Keynote speaker Suzanne Tavill Global Head of Responsible Investing; Managing Director Featured spotlight discussion with StepStone Group Alison Fenton-Willock Senior Vice President, Ms. Tavill is the global head of responsible investing, leading all ESG Global Head of ESG initiatives across all businesses and Blackstone investment strategies at StepStone Group, a global private markets Alison Fenton-Willock is a Senior Vice President and specialist overseeing more Blackstone’s Global Head of ESG. In this role, she than $280B of private capital leads the firm’s overall approach to Environmental, allocations, including over $58B Social and Governance (“ESG”) issues of assets under management. that impact its investing activities. Ms. Fenton-Willock joined Blackstone’s Legal and Compliance department in 2016 and previously focused on private equity compliance. Confirmed speakers include Greg Bowes Alifia Doriwala Jeff Pentland Co-Founder and Managing Director and Managing Director Managing Principal Partner Northleaf Capital Albright Capital RockCreek Partners Sanaz K. Raczynski Jennifer Signori Megan Starr Managing Director, Head Senior Vice President, Principal and Head of Climate of Sustainability ESG and Impact Investing Impact Nuveen Neuberger Berman The Carlyle Group Investors For program information, contact Zakira Ralling at For exclusive sponsorship packages, contact Tyler Mitchell at [email protected] or call +1 646 545 3321. [email protected] or call +1 646 795 3279. turn up Register today privateequityinternational.com/rifny the heat Responsible Investment Forum: Europe Private Market Fundraising London 2020 World-class fundraising techniques for private Proving the value of ESG in equity, debt, real estate and private equity infrastructure funds Content highlights: 11—12 June • Acquire insight into how LPs are viewing the fundraising environment and how they are approaching portfolio construction • Optimise your firm’s preparation with detailed timelines and plans • Take full advantage of ‘non-marketing’ situations for marketing Who will you meet at the forum? • Familiarise yourself on how to work with placement agents for an optimal campaign and 300+ 80+ 150+ with gatekeepers to get your foot in the door Institutional Fund & Asset • Nail that all important face-to-face presentation... Attendees Investors Managers plus much more “As an investor in private equity only, the PEI Responsible Investment Available now Forum is our number one go to event for learning, sharing and Order this essential title today networking around ESG.” Anna Follér, Sustainability Manager, AP6 www.privateequityinternational.com/private-market-fundraising Book now to save up to £300 Special offer to subscribers: privateequityinternational.com/rif Order your copy today quoting SUBBK15 and receive a 15% discount Contents How to contact us Senior Editor, Private Equity Toby Mitchenall [email protected], +44 20 7566 5447 Responsible Senior Editor, Private Equity, Americas Isobel Markham [email protected], +1 646 380 6194 Investment 2020 Senior Special Projects Editor Graeme Kerr [email protected], +44 20 3862 7491 ISSN 1474–8800 • FEBRUARY 2020 News Editor Adam Le [email protected], +44 20 7566 5437 Senior Reporters Carmela Mendoza Slow progress for women in private [email protected], +44 203 640 7512 Insight equity: A lack of gender balance is Rod James rarely a deal-breaker 33 [email protected], +44 20 7566 5453 Asia Reporter 2 Alex Lynn [email protected], +852 2153 3148 Key trends The biggest ESG factors Contributors for investors Amy Carroll, Claire Coe-Smith, Simon Meads, Vicky Meek, Ben Payton, Victoria Robson EDITOR’S LETTER 4 Managing Editor, Production: Mike Simlett Head of Production: Greg Russell Production Editors: Daniel Blackburn, Analysis Adam Koppeser, Karl Shmavonian Copy Editors: Eric Fish, Nicholas Manderson Art Director: Mike Scorer 5 Head of Design: Miriam Vysna Integrating ESG: A sustainable approach Senior Designer: Lee Southey to investing goes hand-in-hand with Designer: Denise Berjak higher returns, say CVC’s Jean-Rémy Head of Marketing Solutions, Roussel and Chloë Sanders Private Equity Group: LPs take a stand on climate: More How ESG can drive returns: Delivering Alistair Robinson [email protected], +44 20 7566 5454 investors are voicing their global what today’s ethically minded consumers Subscriptions and reprints warming concerns to their GPs 8 want is opening up opportunities, says [email protected] A new investment climate: Partners Dennis Ever of L Catterton 35 Customer Service Group’s Adam Heltzer explains the impact Beyond carbon emissions data: Anna [email protected] of climate change on its portfolio 12 Editorial Director: Philip Borel Follér of AP6 on GP behaviour 39 Director, Digital Product Development: Communicating the concerns: CDPQ’s Questioning the commitment: Pantheon’s Amanda Janis Bertrand Millot talks climate change 16 Helen Steers and Alex Scott outline the Director of Research and Analytics: Dan Gunner Change is coming: David Russell of USS firm’s evolving approach to ESG 40 Managing Director, Americas: Colm Gilmore sees GP attitudes evolving 17 Are ESG scores ready for prime time? 43 Managing Director, Asia: Chris Petersen Investing in the future: 3i’s Peter Wirtz Chief Commercial Officer: Paul McLean Private equity embraces impact: nd Anna Dellis discuss how the Managers are increasingly raising funds Chief Executive: Tim McLoughlin sustainability agenda is changing 18 that marry returns with positive outcomes, A CFO issue: Sustainability is turning says KPMG’s Tania Carnegie 48 into a numbers game 20 Blended finance:A model for impact? 51 ESG needs to start from the top: Gone are the days when lip service alone ESG and impact: On a collision was enough to assuage investors, says course? Nuveen’s Amy O’Brien and StepStone’s Suzanne Tavill 25 Rekha Unnithan chart PE’s responsible investment journey 54 Keeping faith with responsible investing: For subscription information visit The Church of England says it can uphold What we learned at the forum 57 privateequityinternational.com its ethics by carefully selecting its GPs 28 In the line of duty: Q&A with Debevoise Lessons from a decade of ESG: Permira’s & Plimpton’s Simon Witney 59 Adinah Shackleton discusses its evolving approach to environmental, social and governance issues 30 Points of view 60 February 2020 • Responsible Investment 1 Hot topic LP scrutiny of approaches we are going to take a more demanding approach. to ESG is intensifying, with climate At the UN in December, we announced we’re going to be net-zero change a key concern. Here are carbon by 2050. In that context it’s inevitable that at some point all the seven takeaways from this year’s money we manage will have to be strictly climate-compliant. And that will apply Responsible Investment report to external managers. For GPs that don’t do anything on climate, I’m not sure we’ll be investing with them in Climate change is a – investors need to open their eyes the future.” growing focus to this global crisis. “We’re not only “The biggest challenge is how doing this because we’ve been Risk management to address the risk and the shouted at, but the protesters have is key opportunity,” says Sean Collins, helped our thinking. There’s been a Directors have a duty service manager (pensions) at recognition that we need to do more to take ESG into Oxfordshire County Council, and be more transparent and work account, says Simon which runs the £2.5 billion with others including FFO to Witney, special ($3.3 billion; €2.9 develop a policy,” says Collins. counsel at Debevoise billion) Oxfordshire & Plimpton. “Any issue Pension Fund. The LPs want to be seen to that affects a firm’s risk fund, with a 7.2 lead by example profile can fall within the percent allocation With C$327 billion ($245 ESG category,” he says. to private equity, is billion; €221 billion) of net “In my view, a lot of this currently developing its first assets, of which C$43 billion is about governance – it climate change policy. is invested in private equity doesn’t really matter if Environmental (through funds and direct you classify an issue as being activism has investments), Canadian pension part of ESG; what matters played its part. The fund Caisse de Dépôt et is ensuring good corporate Oxfordshire Pension Fund Placement du Québec governance and proper risk came under pressure believes it can influence GPs management.” from activists Fossil Free and their response to climate- Data protection is paramount. Oxfordshire (FFO) to divest related issues. “We try to “Cybersecurity and data privacy are from all its fossil fuel holdings. sensitise them to the importance becoming more of an issue for private But other factors are at play, of it, and educate those that equity, because of the GDPR but also too. There’s a clear sense don’t realise the importance,” because society at large is focusing more that with climate change says chief stewardship investing on these issues. And of course, anti- becoming more visible – most officer Bertrand Millot. “We lead corruption is a perennial concern,” says strikingly with the Australian bushfires by example and increasingly Witney. 2 Private Equity International • February 2020 A sense of For GPs that Diversity is rarely a understanding is “ deal breaker required don’t do anything on LPs are becoming The £2.5 billion Church more diversity- of England Pensions climate, I’m not sure conscious, but a lack Board describes itself of gender balance in as being on a “fairly we’ll be investing investment teams is early stage of our rarely a reason to pull private equity with them in an investment. journey” and has the future Data compiled just started working ” by Private Equity with Cambridge Bertrand Millot Recruitment, an executive CDPQ Associates to increase search firm, suggests only its holdings to a target 13 percent of partners in allocation of 7 percent.