The availability of ESG data for illiquid investment strategies such as private debt, private equity, infrastructure and real estate has been traditionally viewed sceptically by many market participants.
Lack of mandatory ESG disclosure requirements such as CSRD, SFDR or the EU Taxonomy for the majority of unlisted and / or non-EU companies as well as real assets might be the main reason for this scepticism.
But can those subjective prejudices be confirmed by objective and representative ESG data? This is one of the key questions of our ESG research. For the PAI (Principal Adverse Impact) reference periods 2022 and 2023 we engaged with over 1,000 illiquid target funds with the purpose of collecting and validating PAIs via European ESG Template (EET). We documented our findings for each year below. There is a strong evidence that the traditional prejudices of low quality ESG data for illiquid assets might be incorrect since a significant number of illiquid funds does provide quantitative regulatory ESG reporting and this trend strongly grew in the last 2 years.