Stockholm (NordSIP) – On January 7th, the UN Principles for Responsible Investment (UN PRI) announced that Anna Follér had been appointed as Chair of its Private Equity Advisory Committee (PEAC), which advises the PRI on the strategy and execution of the private equity programme.
“The many PRIs Advisory committees guide the PRI’s work and help to implement PRI work programmes. The PEAC advises the PRI Executive, Peter Dunbar, Private Equity Senior Specialist, on the strategy and execution of the PRI private equity (PE) workstream. The PE workstream is at the forefront of exploring the possibilities of ESG integration within PE investing, working with other industry associations to deliver widespread impact,” Follér, who is Head of Sustainability at AP6, tells NordSIP.
Follér highlighted the prominence of venture capital initiatives in terms of the focus of the Committee’s focus on sustainability.
The PEAC’s Agenda
The PEAC members act in an advisory role to the PRI Executive on workstream strategy and activity, aligned with the broader PRI strategy. The focus of the Committee’s work includes at least four topics. It seeks to consolidate the industry’s understanding of responsible investment and align reporting practices. It supports the building and leveraging of partnerships and strategic targets to achieve industry advancement and alignment. It supports peer-to-peer learning and networking. Lastly, it also promotes advancement of ESG integration practices and raises awareness about its value.
“In more concrete terms, the PEAC last year advised the PRI executive and a designated PRI working group in updating the PRI LP Responsible Investment Due Diligence Questionnaire, intended to help investors understand and evaluate a GPs processes for incorporating material environmental, social and governance (ESG) risks and opportunities into their investment practices. Soon, the PRI will publish a discussion paper on the integration of ESG in venture capital (VC), to be followed by more work in the venture capital space. The increased focus on VC is in line with the advice of the PEAC to provide more tailored responsible investment support to the VC sector. Figuring out how to best support PRI signatories within the area of climate change resulted in the creation of a Climate Hub, where PE-relevant resources are continuously added. Going forward the agenda of the PEAC will also consider emerging topics such as biodiversity,” Follér adds.
The Challenges Facing the PEAC
Discussing the main challenges facing the Committee, Follér discussed the importance of supporting the integration of ESG and alignment around best practices.
“Private equity (PE) has made great leaps ahead in ESG and sustainability over the last few years and the sector’s commitment can be illustrated by some PRI statistics,” Follér says before adding that “8 of the top 10 largest global GPs are PRI-signatories” and that “the PRI has 1,032 investment manager signatories who invest at last 10% of their AUM in private equity (buyout, growth, or VC),” of which 317 joined in 2021.
“In addition, several niche initiatives have been launched in various settings to address specific topics, e.g. the initiative Climate International (iCI), the ESG Data Convergence Project, the ILPA Diversity in Action Initiative. Considering this development, the PRI and the PEAC have an excellent opportunity to support signatories to integrate ESG, and to align around best practices. Growth is always challenging however and delivering on the expectations of engaged responsible investors in PE requires clear priorities, top-quality collaboration, and of course the relevant resources and expertise within the PRI,” Follér explains.
The PRIs Advisory committees have an important role to play providing a strong and clear link between signatories and the PRI executive, according to Follér.
The PRI PE workstream was launched in 2008 when the PRI had only a handful of General Partners (GPs) and Fund of Funds as signatories. Today, the PRI has over 1,000 investment manager signatories who invest at least 10% of their AUM in private equity, and 8 of the top 10 largest global GPs are signatories. The legacy of the many excellent professionals that have served on the PEAC since 2008, is impressive and the former chairs of the PEAC have contributed to a solid structure for a well-functioning committee. I am thrilled and humbled to step into the role of the chair of the PEAC after the former chair Michael Cappucci of Harvard Management Company, who did a fantastic job chairing the committee during extraordinary times,” Follér says.
Considering the dynamic development of responsible investment and sustainability in private equity, my focus will be to leverage the collaboration and expertise in the excellent group of highly experienced individuals from different backgrounds and roles, and to support Pete and the committee to prioritise in the very busy environment of responsible investment in PE,” Follér adds.
On this occasion, the PRI also announced the appointment of five new signatory representatives to the Private Equity Advisory Committee, from the start of 2022. The new members include Andrew Collins, Director of ESG and Responsible Investing at the San Francisco Employees’ Retirement System (SFERS); Alison Loat, Managing Director – Sustainable Investing and Innovation at OPTrust; Carmela Mondino, Head of ESG & Sustainability at Partners Group; Michael Musuraca, Strategic Advisor of ESG and Labour at Blue Wolf Capital Partners LLC; and Suzanne Tavill, Head of Responsible Investing at StepStone Group.
The new members replace Michael Cappucci, Harvard Management Company (HMC) – Outgoing; Chair Silva Dezelan, Stafford Capital Partners; Ignacio Sarria, New Mountain Capital; Jennifer Signori, from Neuberger Berman; and Scott Zdrazil, from Los Angeles County Employees Retirement Association (LACERA).