Value creation is the top driver for ESG activity in private equity

ESG as a value driver

ESG as a value driver
  • Publication
  • 6 Minute Read
  • October 27, 2023

Private equity (PE) firms’ outlook on environmental, social and governance (ESG) topics has matured considerably in the past 10 years since PwC first surveyed PE firms on their ESG approach. Where risk management was once the main concern, PE firms surveyed recently overwhelmingly report that they believe ESG management can help create value.


PE firms are more likely to report qualitative outcomes than directly measurable financial impacts, typically identifying brand enhancement, risk mitigation, competitive differentiation and client attraction as the main benefits to their organisation of ESG-related investment activities.


The Global Private Equity Responsible Investment Survey explores the views of general partners and limited partners in responsible investment among global private equity firms. 166 respondents from 22 countries and territories responded to the latest survey, including Belgian firms or international firms that have a strong Belgian footprint.

Key findings

Five key findings from the 2023 Global report

Value creation recognition

Private equity firms are increasingly recognising the value of ESG, with 70% considering it one of the top three drivers.

Qualitative benefits

Although direct financial results are difficult to measure, qualitative benefits such as brand positioning, risk mitigation and market differentiation are widely recognised.

Search for opportunities

Leading companies are actively seeking ESG-related opportunities, incorporating them into their exit strategy, leveraging green incentives and attracting green finance.​

Integrated ESG practices

ESG factors are now – and increasingly – woven into the deal lifecycle. And in doing so, they influence sourcing, due diligence, post-acquisition implementation and deal terms.​

Valuation challenges

Assigning financial value to ESG considerations remains a challenge, with up to a third of companies incorporating ESG factors into valuations.

Private equity and ESG in Belgium

ESG is now part of the deal

In the previous survey (on Belgian PE firms), we observed that Belgian PE firms’ responsible investment (ESG/RI) activities are driven more by corporate values than value creation opportunities. In 2023, we see the same trend, largely because most Belgian actors are still family owned. At global level, however, 70% of respondents are pursuing efforts to identify value creation potential through ESG activities. Nonetheless, at both global and national [Belgian] levels, firms are bringing ESG considerations into their investment decisions, specifying ESG-related opportunities as they define their deal theses.

“In all transactions, ESG is on the agenda. However, the link to value creation is still untapped in the Belgian ecosystem.”

Philippe EstasPartner Deals | Transactions & Private Equity Leader at PwC

Integrating ESG in the valuation analysis

Like other PE firms globally, Belgian actors are increasingly trying to integrate ESG considerations into the valuation of companies. The valuation usually hinges around the one or two ESG topics that present the most significant risk for the company. 


of PE respondents say their organisation embeds ESG into valuation analysis.

Global Private Equity Responsible Investment Survey 2023

Belgian actors are also slowly following the global trend of seeking to source new deals using ESG considerations as a lens. However, these respondents predominantly report seeking value creation through qualitative factors that are often associated with stronger financial performance, such as competitive differentiation and brand enhancement.

A vast majority of Belgian PE firms have adopted ESG tools and policies formalising their ESG approach. This maturity is driven by two main factors: their own corporate values and value creation opportunities. At a portfolio level, ESG factors are more often taken into consideration in relation to executive pay and remuneration for Belgian respondents than globally. In addition, monitoring the ESG performance of their portfolio companies is becoming even more popular compared to the 2021 Belgian survey.

“Increasingly, we observe that ESG can be used to source opportunities, such as PE firms raising funds for Article 9 funds.”

Peter OpsomerPartner Deals

Diving into the specific ESG topics, we observe some similarities with global respondents, although compared to Global respondents Belgian one seems to focus less on environmental topics, beyond climate change and energy.

Climate commands attention.

A vast majority of global and Belgian respondents say their organisation sees greenhouse gas emissions and climate risk as material topics, along with the management of environmental impacts.

Biodiversity bears watching.

Although the share of global respondents who identify biodiversity as material remained about the same as in 2021, more of those respondents (34% versus 27%) now say their organisation plans to address it in the coming year. Biodiversity is not a subject in Belgium.

Social and governance topics galvanise action.

We asked respondents about 16 social and governance topics. On 10 of them, more than 70% of respondents, globally, say their organisation sees them as material, and more than 50% say their organisation has already taken action.

Download the

2023 Global Private Equity Responsible Investment report

Contact us

Philippe Estas

Philippe Estas

Partner, Deals - Transactions & Private Equity Lead, PwC Belgium

Tel: +32 477 27 07 50

Peter Opsomer

Peter Opsomer

Partner, Deals - ESG and Delivering Deals Value, PwC Belgium

Tel: +32 475 55 16 70

Connect with PwC Belgium