The push for environmental, social and governance (ESG) initiatives in the PE space is commonly described as coming from investors. To facilitate those efforts, the Institutional Limited Partners Association (ILPA) has released various resources to provide guidance to investors starting or enhancing their own ESG programs, including a suggested framework for assessing a GP’s ESG-integration progress. To gauge responses and reactions to ILPA’s ESG resources, the Private Equity Law Report spoke with ILPA; its working group members; and lawyers representing a wide range of GPs and LPs, including institutional investors, large asset managers with advanced ESG programs and emerging managers with no stated ESG policies. Overall, experts on both sides viewed the resources as good starting points for LPs but desired more guidance, especially on benchmarking. This first article in a two-part series describes ILPA’s recently released ESG Assessment Framework, including ILPA’s objectives, as well as the LPs and GPs that can benefit from using it. The second article
will discuss the ESG Roadmap, as well as other ILPA ESG resources and the potential impact of those resources on the PE industry. See our three-part series on ILPA’s 2019 model limited partnership agreement: “Seeks to Empower LPACs and Increase GP Accountability for Fiduciary Duties
” (Dec. 10, 2019); “Attempts to Redistribute Economic Risk From LPs to GPs
” (Dec. 17, 2019); and “Faces Sizable GP Skepticism En Route to Becoming a Fixture in PE Fund LPA Negotiations
” (Jan. 7, 2020).