Increasing interest in ESG issues presents an opportunity for sponsors to re-evaluate their existing ESG strategies.
By Paul A. Davies, Nicola Higgs, Farah O’Brien, and Hannah Berdal
The COVID-19 pandemic continues to present unprecedented challenges for European private equity firms and their portfolio companies. A significant number of companies have been forced to undertake emergency liquidity measures, make difficult decisions to ensure the health and safety of their workforce, and pivot their business models, all whilst trying to maintain business continuity.
As the immediate triage period begins to wane, many sponsors are starting to consider how best to improve portfolio performance and take advantage of the record US$1.46 trillion in dry powder held by the sector. The increasing government, investor, and limited partner interest in environmental, social, and governance (ESG) issues, particularly in light of the ongoing pandemic, presents a unique opportunity for proactive sponsors to re-evaluate their existing ESG strategies and reap the benefits of a “green recovery”.
A new Latham & Watkins Client Alert identifies some of the key potential effects of COVID-19 on ESG for European private equity firms and their portfolio companies and addresses practical ways that sponsors can manage increasing ESG risks whilst leveraging the opportunities now and in the years to come.
Read the full Client Alert here.