The Institutional Limited Partners Association released a new ESG resource Wednesday to help private investors understand and measure how general partners are integrating ESG into their processes.
The ILPA ESG Assessment Framework was created with input from both limited partners and general partners, and was prompted by increasing interest from ESG-minded investors to have their GPs in alignment with their goals, the ILPA said in a news release.
The framework is designed to help LPs evaluate and benchmark GP responses to due diligence efforts, inform goal-setting conversations and measure ESG integration progress over time, said the ILPA, which will periodically revisit and update the framework.
The ILPA also offers an ESG Roadmap and has expanded the environmental, social and governance section of its due diligence questionnaire, based on one from the Principles for Responsible Investment that will soon be out for public comment.
"The private markets industry is increasingly focused on stewardship and on making meaningful progress on related issues, like ESG," ILPA CEO Steve Nelson said in a news release.
"LPs are looking for alignment with their managers on ESG integration, and GPs are looking for clarity on what LPs expect," Mr. Nelson said. "The framework helps solve for both of those issues: For GPs, it sets expectations on what LPs are looking for and for LPs, it provides a rubric against which they can assess and benchmark a manager during due diligence. And over time, LPs will be able to use this information to set goals and to track a manager's progress on ESG."
