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ESG in 2024: What you need to know

Dig into the challenges and opportunities associated with ESG in 2024, including what it is, whether it requires sacrificing returns, how it intersects with greenwashing, and more.

Contentious, polarizing, and political. Across the capital markets, those are the terms often used to describe ESG. But what is ESG, exactly? And what’s on the minds of private market professionals when it comes to ESG in 2024 and beyond? In our recent, five-part Untangling ESG video series, PitchBook Senior Analyst Anikka Villegas—an expert on sustainable investing and fund strategies—weighs in.

What is ESG and why does it exist?

Hotly debated by asset owners and managers across the financial landscape, consensus about what ESG is—and what it isn’t—remain elusive. In this video, Senior PitchBook Analyst Anikka Villegas explains what ESG is and why it exists, what it means to be an ESG investor, and why ESG is sometimes confused with impact investing.

Does ESG require sacrificing returns?

Whether ESG-aligned investing requires sacrificing returns is a contentious question at the heart of the ESG debate. Not necessarily, Villegas says. But why? In this video, she digs into ESG philosophies and approaches to implementation, the historic lack of research on the topic, and PitchBook’s initial findings on PRI signatory status’ influence on returns.

What is greenwashing and what does it have to do with ESG?

Though the definition of greenwashing seems straightforward, claims are often levied by individual observers—not regulatory bodies. This video examines how ESG and greenwashing are related, as well as how ESG’s many forms make greenwashing accusations more abundant and less accurate—often leading to frustration and confusion.

What are the main challenges facing ESG investors?

In the fourth video of our Untangling ESG series, Villegas walks through sustainable investing’s top challenges—including a lack of convergence around one framework and one set of ESG and impact metrics that can effectively quantify performance.

What is ESG’s role in creating a socially and environmentally sustainable world?

ESG investing isn’t the solution to the world’s problems, but Villegas says that it is an important piece of the puzzle. In this video, she examines what ESG can do—from aligning social and environmental sustainability with financial performance goals to creating positive outcomes for local ecosystems and DEI efforts.

More ESG resources from PitchBook

To explore key trends shaping the sustainable investing space in 2024 and beyond, check out Villegas’ Analyst Note: The State of Private Market ESG and Impact Investing in 2024.

For more expert insights on arguments most often levied against the use of ESG, download Villegas’ Analyst Note: Concerns About and Criticisms of ESG.

To look more closely at what GPs and LPs really think about impact and ESG, get a copy of PitchBook’s 2023 Sustainable Investment Survey.

To peel back the layers of ESG and impact investing in private equity and venture capital, get your copy of PitchBook’s Analyst Note: ESG, Impact, and Greenwashing in PE and VC.