ESG in Private Debt: Rising to the Challenge

Until the mid-2010s few investors paid attention to Environmental, Social, and Governance (‘ESG’). Today, ESG has proliferated financial markets and a growing number of investors around the world are implementing a wide range of ESG incorporation practices to inform investment decisions. This represents nothing short of a revolution in financial markets, promising to fundamentally shift how the financial services industry and society in general views and approaches capital allocation.

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KKS Advisors (now part of dss⁺) and Arcmont Asset Management

Published on Dec 1, 2021

The combined positioning of Arcmont and KKS as market leaders in Private Debt investing, ESG, and sustainable investment puts the authors at the forefront of this unfolding revolution. As such, we are confident we can contribute to industry-wide knowledge on ESG by offering an introduction to, and an assessment of, the state of play and evolving trends regarding ESG integration in Private Debt. In turn, we believe this can act as a key driver of change for ESG investing in the Private Debt industry.

With this in mind, the goals of this thought leadership paper are (i) to serve as an introduction to ESG integration viewed through the lens of a mid-market private lender, (ii) to offer a framework for integrating ESG into the Private Debt asset class, and (iii) to help the industry create ESG integration best practices by providing insights and current practices from Arcmont.