“We can strive for some standardisation,” adds De Baere. “But part of the issue is that some LPs place a heavier weight on environmental concerns, such as those who have committed to go net zero, while others place more emphasis on social topics, such as human rights standards across a company’s supply chain. I’m not sure how much global alignment we can reach because of these different perspectives. That said, some forthcoming global-level initiatives will prove helpful towards standardising ESG data – although it will take a couple of years.”
Indeed, many are hopeful that there can be some progress towards standardisation, even if it is not complete. “We see some uniformity around, for example, the Paris Agreement goals,” says Nick Haaijman, Global Head of Private Asset Solutions at Fidelity International. “There is much less on the S and the G, though. Collectively, as an industry, there is much we can do to harmonise information and feed this back to LPs.”
And there are signs that the data-gathering is becoming at least a little less painful. “We’ve seen an acceleration in transparency and information provision,” says De Baere. “It used to take two days to piece together the information a couple of years ago. Now, we are at least getting the basic information we need on a timely basis. That’s important because it’s not just investors asking for this; other stakeholders are expecting the same.”
