Opportunities and Challenges in ESG and Impact Investing for Alternative Asset Managers and Investors (Part Two of Two)

The popularity of funds that address environmental, social and governance (ESG) issues in some way continues to rise. Still, there are many challenges for alternative asset managers and investors in the space. Preqin recently hosted a webinar to present key findings from its ESG in Alternatives 2023 report and to provide insights from industry experts on the issues raised in the report. The program commenced with summative insights from Rachel Dabora, research insights analyst at Preqin, and the panel discussion was moderated by Soojin Kim, assistant vice president and head of ESG research at Preqin. The panel comprised experts with a range of roles and responsibilities, including Jaclyn Bouchard, executive vice president, head of ESG solutions and corporate responsibility at Preqin; Yovanka Bylander, head of sustainability, TimesSquare Capital Management; Kirkland & Ellis partner Jennie Morawetz; and Michael Viehs, global head of sustainable investing, Partners Capital. This second article in a two-part series discusses the rising popularity of ESG funds and impact investing in the alternative asset management industry. It explores issues such as greenwashing, regulatory developments, reporting challenges and the evolving landscape of ESG investing, including the potential clash with anti-ESG movements and the regulatory efforts to address these concerns. The first article explores the intricacies of fundraising and pivotal themes shaping the ESG landscape, including the dominance of PE; the impact of the Inflation Reduction Act of 2022; and considerations such as climate adaptation, biodiversity, human rights and diversity, equity and inclusion within the ESG environment. For additional insights from Morawetz, see our two-part series on mitigating climate risk: “Advantages to PE Firms Pursuing Climate Risk Programs and Pitfalls to Avoid” (Jun. 30, 2020); and “Solutions for PE Firms to Develop a Physical Climate Risk Program” (Jul. 14, 2020).

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