Private equity and debt firms are making progress on environmental, social and governance fronts, including diversity and the inclusion of women and other traditionally underrepresented groups.
The third annual survey of PE and credit partnerships, conducted by asset manager PineBridge Investments, covered 59 organizations worldwide. PE and credit outfits are key parts of institutions’ push into alternative investments.
These investment partnerships are increasingly incorporating ESG policies, the survey found. But, PineBridge said, “while the survey showed that hiring and advancement of women and employees from traditionally underrepresented groups are moving in the right direction, there is still significant room for improvement.”
One survey respondent told PineBridge, “Improvements should be incremental—we can’t dramatically change the dynamics overnight, but firms should start by measuring the baseline, assessing the culture and working out tangible and practical ways to improve diversity across all dimensions.”
The portion of managers surveyed who ensure the diversity of investment teams has grown to 49% in 2022 from 26% last year.
Regional differences are noticeable. A daunting 100% of European and emerging market (Asian, Latin American and African) managers have ESG policies in place, compared with 80% in North America. And 74% of European managers and 71% of Asian ones reported identifying pertinent climate-related performance indicators, while just 20% of North American respondents do.
Some 93% reported taking formal steps to support hiring diverse talent, an increase from 81% last year. Plus, 73% said they have taken formal actions to back equity and advancement of women and other employees from traditionally underrepresented groups. That’s up from 66% in 2021.
The news is not all rosy. For instance, the portion of women on investment teams remains low, with just 18% of those surveyed reporting that women hold at least a quarter of these roles.