ESG and Impact in Private Markets

As with all our investments, we have put ESG considerations at the heart of our processes and approach for investing in private markets.

We are active stewards of the investments that we make on behalf of our clients around the world. We integrate environmental, social and governance-related considerations into our investment processes for all our asset classes, and actively engage with companies and other investments on their strengths and weaknesses.

We have adapted this focus on ESG for private markets making it an integral part of our investment, due diligence and monitoring processes. This emphasis on active stewardship lies at the heart of our philosophy and who we are as an investment firm.

Key benefits

Our global ESG resource

We have a market-leading ESG resource in terms of the number of people, and their experience, expertise and talent. Our success lies in our ability to connect across teams, geographies, public and private markets clients. We also play a pivotal role in connecting our investment decision-makers more closely with the aims and objectives of our clients.

First-hand interaction is key

In private equity, for example, we ask all general partners (GPs) to complete our questionnaire, which is based on the four pillars of responsible investing laid out by the United Nations-supported Principles of Responsible Investment (PRI). We have also pushed for ESG to be a standing agenda item on the agenda of advisory boards of GPs so that we can monitor progress.

Most of our target managers now have an ESG policy. We are proud to have been instrumental in encouraging several small/mid-market GPs to adopt such a policy.

Impact investing

Private markets impact investing involves investing in opportunities which have an intentional and measurable positive environmental and social impact. We believe private markets provide a broad range of impact opportunities and that ASI is particularly well placed to provide attractive private markets impact solutions for investors.

What we offer our clients

ESG Integration

Aberdeen Standard Investments sees ESG as examining a potential or current investment from a risk and opportunity perspective. We analyse all of an investment’s risks and opportunities before and after investment is made to understand the quality of that investment and to help us know how best to engage a company on its material issues. We do not examine financial and/or ESG risks in silo, but rather look at these in combination, so that we have the best understanding of where a company is in terms of its quality and potential over the longer term. This process is quite unique to Aberdeen Standard Investments, in that we do not necessarily weigh ESG or financial factors equally.

Impact Investing

Our impact investing approach targets strong financial returns alongside positive social and environmental impact. Using the UN Sustainable Development Goals (SDGs) as a framework, we developed eight impact pillars to assess, address, monitor and measure the ways in which our investments contribute to positive social and environmental outcomes.

Reporting

We believe it is important to be as clear and informative on the major ESG issues surrounding both our own business and our investee companies. We produce quarterly updates on ESG themes and trends, as well as our own ESG engagements and activities. We also produce bespoke client reporting for our sustainability-driven solutions, such as our impact investing strategies.

  • ESG Integration

    Aberdeen Standard Investments sees ESG as examining a potential or current investment from a risk and opportunity perspective. We analyse all of an investment’s risks and opportunities before and after investment is made to understand the quality of that investment and to help us know how best to engage a company on its material issues. We do not examine financial and/or ESG risks in silo, but rather look at these in combination, so that we have the best understanding of where a company is in terms of its quality and potential over the longer term. This process is quite unique to Aberdeen Standard Investments, in that we do not necessarily weigh ESG or financial factors equally.

  • Impact Investing

    Our impact investing approach targets strong financial returns alongside positive social and environmental impact. Using the UN Sustainable Development Goals (SDGs) as a framework, we developed eight impact pillars to assess, address, monitor and measure the ways in which our investments contribute to positive social and environmental outcomes.

  • Reporting

    We believe it is important to be as clear and informative on the major ESG issues surrounding both our own business and our investee companies. We produce quarterly updates on ESG themes and trends, as well as our own ESG engagements and activities. We also produce bespoke client reporting for our sustainability-driven solutions, such as our impact investing strategies.

Webinar: Managing ESG risks and opportunities in private markets

Key documents

Read our Q1 2019 report on Global ESG Investment is now available. Click here to read it.

Integrating ESG. Click here to read it.

Warning
Risk warning - Before investing, investors should consider carefully the investment objective, risks, charges, and expenses of a fund. This and other important information is contained in the prospectus and KIID document. The information is intended to be of general interest only and should not be considered as an offer, investment recommendation or solicitation, to deal in the shares of any securities or financial instruments.