New BVCA report looks at how members and the wider private capital industry are responding to ESG expectations

The BVCA today published a new report ‘Creating sustainable growth: private capital at work’ to demonstrate how BVCA members and the wider private capital industry are responding to increasing expectations to improve performance and transparency on environmental, social and governance (ESG) matters.

The report provides a brief overview of the current regulatory landscape, and what the BVCA has been doing to bring together investment firms, standard setting bodies and regulators.

Businesses in general are beginning to get to grips with requirements for transparency and disclosure on factors such as greenhouse gas emissions, board diversity and corporate governance and private capital backed firms are no different.

In late 2022, the BVCA, along with Invest Europe and other European trade associations ran its first European survey collecting information on environmental, social and governance metrics. The survey found:

• As private investors become under increasing pressure to monitor and disclose their climate-related risks, the data shows that nearly 25% of medium size firms and over 5% of small firms, for which we received a response, collect data on Greenhouse Gas emissions from the company’s supply chain, going above and beyond existing legal requirements.
• 85 companies covered by our survey stated that they had Net Zero targets. 72% of firms which stated a Net Zero target date were aiming for 2030 or earlier. 
• It is widely recognised that more diverse teams bring different perspectives and make better decisions. Our ESG survey data reveals that on average only 17% of board members at portfolio companies backed by private capital firms were women. This is still far off from the 40% target set by the FCA for listed companies. 
• When it comes to governance, clear and transparent processes are a core part of the private capital investment model. The data shows that the vast majority of businesses in our survey have policies in key areas such as anti-bribery, cyber security and employee and customer privacy. Larger companies and those in the Financial and Insurance sectors are more likely to have established anti-corruption and cybersecurity policies.

Read the report

BVCA Director General, Michael Moore, said:

“The BVCA has a key role in convening our members, standard setting bodies and UK regulators to encourage business growth using best practice environmental, social and governance principles. This report provides a snapshot of how the industry has progressed whilst acknowledging that there is still much more to do.”

Notes to editors

About the BVCA

The British Private Equity & Venture Capital Association (BVCA) is the industry body for the UK private equity and venture capital industry. The BVCA has over 750 member firms, including more than 450 fund managers and institutional investors, representing the majority of UK-based private equity and venture capital firms and their advisers.

About the survey

79 member firms provided data on portfolio level ESG metrics and 153 member firms provided sustainability regulation data. In total, data was received on 694 funds and almost 1300 companies from BVCA members.

For more information on any of the above, please contact External Communications Manager, Karen Keany, [email protected]