Value of Sponsors Implementing Portfolio Monitoring Models for ESG and Cybersecurity Issues

Cybersecurity and environmental, social and governance (ESG) investing have become two of the most prominent issues in PE investing and portfolio company management. Despite fundamental differences in the two areas, it is possible for a PE sponsor to wield a portfolio monitoring approach that functionally oversees both areas for each of its portfolio companies. Effective oversight of each area can better position sponsors to implement robust policies, procedures and controls at their portfolio companies. A recent ACA Group (ACA) program explored the current cyber threat landscape; trends in ESG investing; regulatory developments affecting ESG and cybersecurity; and the potential intersection of ESG and cybersecurity governance and oversight. The program featured ACA partner Dan Mistler and ACA Aponix partner Chad Allan Neale. This article distills their insights. See “Emerging Trends in LP Demands for Standardized ESG Reporting and How GPs Have Attempted to Comply” (Jul. 20, 2021); and “Fund Managers Should Use a Checklist to Ensure a Privacy Compliant Return to Work” (Jan. 26, 2021).

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