Monday, 11 November 2019
Asian private equity spotlight: Bringing ESG to the forefront
According to a 2018 Bain report, 60% of Asia-Pacific-focused GPs are feeling increasing pressure from their investors to comply with ESG guidelines and conduct more deals in environmentally and socially responsible sectors. While studies have shown a clear indication that ESG commitments correlate with better financial results, there are still Asian GPs who remain sceptical. In light of this, join our panel of distinguished experts in a discussion of the drivers impacting the growth of ESG in Asia, including the updated regulations and best practices, and gain an understanding of the value proposition ESG adoption brings.
- Why should ESG be part of a fund manager’s value creation strategy?
- What are some micro and macro factors that have impacted ESG investing in Asia this year? For example, HKMA’s key measures on responsible investing.
- Where are the most compelling ESG opportunities across Asia, and what are some country specific ESG issues to be aware of?
- Is impact investing a natural extension of ESG?
Networking coffee break
Fireside chat: Developing an ESG framework from start to finish
For GPs who are still in the early stages of taking ESG standards into consideration, it is difficult to decide how and where to begin. Hear from a leading Asian GP who has successfully implemented an ESG strategy from start to finish and is now successfully working with their portfolio companies to strengthen ESG performance. Gain an insight into the nuts and bolts of developing a framework, including the first steps, working with the investment team, and the due diligence checklist tools used, as well as the challenges and lessons learned along the way.
The importance of good governance in private equity
Effective governance is a vital component of the ESG process at the portfolio company, fund, and fund manager level. It also plays an important role in creating value, mitigating operational risks, and establishing sound environmental and social practices. Recent high-profile governance incidents have put the private equity industry under the spotlight, resulting in regulators, investors, and other stakeholders demanding greater transparency from industry participants. While there is no one-size-fits-all solution to developing a quality governance framework, our panel of experts will provide advice on how best to approach this increasingly crucial topic.
- Why is it becoming so important for the asset class to demonstrate good governance?
- How can GPs demonstrate a commitment to key governance issues in Asia?
- What are some key corporate governance principles that all GPs should consider as part of their framework? For example, board diversity and anti-corruption policies.
- What are some of the operational due diligence considerations that Asian-focused LPs are focusing on?
Developing private equity impact investing in Asia
As impact investing begins to take hold in Asia, private equity investors are taking note and investing in assets with significant social and environmental impact. However, when it comes to including impact considerations into their strategies, firms have to carefully consider how best to measure these goals in a practical manner, including through supply chain sustainability. Hear from regional and global private equity impact investors who have developed their own measure of impact, and have been able to align their existing portfolios and impact themes with the UN’s Sustainable Development Goals (SDGs), and then utilise them as a framework.
- What is driving the impact investing trend across Asia, and which countries show the most opportunities?
- How can investors best integrate impact considerations throughout the entire investment lifecycle, and what practical steps should be taken?
- What are some challenges associated with impact investing?
- How can private equity investors effectively use the SDGs as a framework to measure impact and to demonstrate sustainability as a source of value?
ESG reporting, engagement, and disclosure
Although more private equity firms are ramping up their frameworks to become more ESG compliant, as well as engage with their portfolio companies on responsible investing issues and environmental and social impacts such as climate change risks, GPs are still struggling to develop effective reporting and monitoring systems. Asian based GPs engaging with portfolio companies may require a more on-the-ground approach towards reporting. In this session, a group of experts will share their approaches on how best to construct a meaningful ESG reporting system throughout the investment process, and how to design policies that will promote transparency and disclosure from portfolio companies.
- For Asian GPs who are just beginning their ESG journey, what are some pragmatic ways to implement ESG?
- What are some of the risks and opportunities that can be identified during the due diligence process? For example, climate change risk assessment and disclosures
- What are some of the post-investment monitoring complications faced by Asian GPs when engaging with portfolio companies and the wider stakeholder transparency requirements? For example, listing rules.
- What is the UNPRI doing to promote meaningful ESG reporting across the industry?
Case study: How a GP successfully implemented a climate risk strategy
The challenge of managing climate risks has been at the forefront of concern for most investors. Moreover, with UNPRI signatories being required to report on strategy-related indicators of climate risk by 2020, the need to understand how to implement an effective climate risk strategy has never been more crucial. Hear from a leading European GP who has successfully developed a climate risk strategy, the processes and tools they used to effectively monitor their portfolio companies, and how Asian GPs can be prepared for the unique climate challenges ahead.
Networking coffee break
LPs’ views on responsible investing in Asia
Globally, LPs are prioritising that private equity funds take ESG factors into account when making investment decisions. In response, many GPs have announced plans to increase sustainability efforts in the future. However, for many Asian LPs, efforts to establish ESG investing polices for the asset class have been relatively slow compared to their Western counterparts. Join our panel of leading LPs in a discussion of the best practices and recommendations for responsible investing in the Asia-Pacific region.
- What sort of ESG factors are institutional investors taking into consideration when selecting a suitable fund manager?
- How are LPs preparing themselves for the unique challenges presented by ESG investing in Asia?
- How can GPs make sense of evolving LP requirements in areas such as carbon footprinting?
- Are LPs increasing their focus on the impact of their investments?
Roundtable discussions: Meet the experts
Moderated by industry leaders, these interactive discussions focus on trending sectors in the ESG space, and aim to encourage discussion and debate. Focusing on topics that are increasingly impacting ESG investors, the roundtable discussions will cover:
- The role of secondaries in ESG
- Tackling water risks from a private equity perspective
- Investment opportunities in food sustainability
- Understanding traceability in the supply chain
- Catalyzing capital to prevent ocean plastic waste
Close of conference and cocktail reception