Commentary: TPC supports disclosure framework for ESG factors

Teachers' Private Capital (TPC) is part of a group of major international private equity investors that recently established a framework to guide disclosure of environmental, social and governance (ESG) factors between funds and clients.

The framework is consistent with Teachers' approach to responsible investing and is intended to support meaningful dialogue by assisting private equity funds (general partners) in understanding the ESG information needs of investor clients (limited partners), such as TPC. Teachers' support is part of a commitment to ongoing consideration of ESG-related issues throughout our investment processes.

The framework identifies eight objectives common to investors adopting a structured approach to ESG disclosure, including investor alignment, an evaluation of value drivers and risks, portfolio monitoring in the context of ESG, and disclosure of ESG-related incidents.

Created in consultation with the Institutional Limited Partners Associations and the PRI Initiative, the framework is a first step in a longer term effort designed to align the interests of all private equity parties. Future work will seek more integration of the framework at the investor level and communication of its benefits from both a due diligence and investment performance perspective.

A copy of the framework is available here.