ESG’s return impact downgraded

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Investors overall appear to have less faith in ESG’s transformative characteristics in the long term, especially those based in the US.

After a period of heightened focus on environmental, social and governance issues, LPs have begun to recalibrate their ESG strategies amid escalating political pushback against such initiatives, particularly in the US.

Only 59 percent of LPs believe a strong ESG policy will lead to better long-term returns in their private markets portfolios, according to Private Debt Investor’s LP Perspectives 2024 Study (see chart). This marks a decline from 69 percent in last year’s study and 74 percent two years ago.