Integrating ESG: Creating Value Through Portfolio Engagement

Claire Richards

Principal Consultant

ESG Transactions & Sustainable Finance

Table of Contents

• Set out a focused pathway
• Building capacity and awareness
• Collective upskilling and education
• Leverage portfolio forums
• Initiate peer-led collaboration
• How Anthesis can support
• Contact us

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It’s fair to say that ESG has seen a few turbulent months. Throughout this time, and looking ahead, one thing remains clear: ESG helps build lasting resilience in every business. Basic ESG practices, policies, and processes provide a stable foundation for resilient growth and can help minimise disruption in the wake of merger and acquisition activity. However, strong ESG performance, coupled with a clear sense of purpose, can be truly transformative and unlock significant business value. For private equity firms, this is critical for maximising exit value across the portfolio. But how can ESG managers engage portfolio companies in a way that demonstrates the opportunity to de-risk and improve performance?

In this article, Claire Richards, Anthesis Principal Consultant, explores how ESG programmes and frameworks can be effectively delivered through portfolio engagement and drive value creation.

Set out a focused pathway prioritising material ESG risks and opportunities

In a post-deal environment, management teams face significant shifts – additional financial metrics, potential team changes, and a new board with its own reporting requirements. ESG considerations must be seamlessly integrated into this critical path. Onboarding portfolio companies onto the firm’s ESG programme soon after investment creates an opportunity to engage and educate management teams on the value creation opportunities of sustainable performance, and to develop management plans for ESG risks raised in the due diligence process.

Effective prioritisation and a strategic roadmap tailored to each company’s material issues are key for busy management teams. Materiality assessments help pinpoint priority issues, such as carbon emissions, labour practices, or governance risks, based on sector, geography, and business model.

Building capacity and awareness

In today’s rapidly evolving landscape, keeping up to date with new regulations and shifting customer expectations is increasingly challenging. Many management teams face capacity constraints and lack the technical expertise needed to navigate complex ESG requirements. Investors can play a crucial role by providing regular updates, training, and facilitating knowledge sharing across the portfolio. Meanwhile, companies can stay informed by seeking external expertise and subscribing to relevant newsletters and webinars. The Anthesis sustainable private equity newsletter not only highlights key private equity insights but also relevant content to share with your portfolio companies.

Hosting annual ESG conferences or forums is an effective way to keep the portfolio informed about the latest developments and upcoming requirements relevant to their sectors. Involving an ESG sponsor alongside someone in an ESG operations role helps renew focus and clarify responsibilities, especially when personnel could change from year to year. Additionally, these forums offer valuable opportunities to engage investment teams and continuously reinforce and embed the firm’s ESG framework throughout the portfolio.

Empower through collective upskilling and education

Sector- or topic-specific training offers a valuable opportunity to upskill portfolio companies collectively on issues that affect multiple businesses.

Selecting the delivery method is critical to the success of portfolio education. E-learning can provide a flexible, cost-effective option to upskill your portfolio on key topics, such as ESG knowledge or climate essentials, whereas more workshop-based delivery will drive active participation and group interaction. Workshops can help uncover shared challenges faced by the portfolio.

In 2021, Anthesis supported Palatine PE to develop and deliver Carbon Literacy training as a full-day interactive workshop. Since then, Palatine’s in-house sustainability team has sustained this momentum by hosting two sessions annually to train over 300 individuals. Carbon Literacy empowers leadership teams to understand the implications of their carbon footprint and the strategic importance of emissions reductions, while bringing portfolio companies together to discuss shared challenges and learnings.

Leverage portfolio forums to align priorities and facilitate networking

Hosting in-person conferences or virtual forums brings together ESG representatives from across the portfolio to network and socialise ideas around a specific industry theme or focus area defined by the PE house. By inviting an ESG sponsor and operational lead, a recurring event re-engages those responsible each year and provides them insights to take back to the business. Experts and advisors at these events can deliver thought leadership and introduce value creation opportunities that may not have been considered.

In May 2025, Anthesis was invited to join Volpi Capital and its portfolio for its annual ESG Forum 2025. Our experts provided an update on the regulatory landscape for climate risk and reporting. This outlined the value of developing robust decarbonisation strategies aligned with costed levers, which demonstrated significant financial paybacks.

Initiate peer-led collaboration forums

Private equity firms are leveraging opportunities to share insights across their portfolios, recognising that companies often face similar challenges, even across funds and different sectors. Working groups create a non-competitive collaborative environment for companies to share experiences, challenges, best practices, ideas, and tools on common themes such as Science Based Targets (SBTs), Corporate Sustainability Reporting Directive (CSRD) compliance, or social valuation.

Palatine’s sustainability team supports its companies in navigating sustainability-related questions in tenders, particularly surrounding Social Value. Driven by the recent Procurement Act 2023 and the new Social Value Model (PPN002), Social Value can no longer be an afterthought when it comes to responding to public sector tenders. Palatine’s Social Value Working Group, initiated by Palatine with support from an Anthesis secondee, aims to create a space for portfolio companies to share knowledge, ideas, and tools around social value, with social valuation methodologies and tools being a predominant discussion theme.

Private equity firms that embed ESG into portfolio operations through clear frameworks, tailored roadmaps, and continuous education position their investments for stronger performance, greater resilience, and enhanced exit readiness. This level of engagement future-proofs individual companies and can elevate the overall reputation and performance of the fund. Ultimately, value beyond valuation is achieved by how actively portfolios are engaged, and how effectively opportunities, such as knowledge sharing, can be realised. That’s where real impact — and value creation — lies.

How Anthesis can support

Our global team of sustainability and private equity experts can support you in designing, implementing, and reporting on your responsible investment strategy, while helping your portfolio companies reach their full potential. We develop tailored engagement approaches that enable you and your teams to clearly demonstrate the value of ESG to a range of stakeholders. Whether it’s onboarding new investments into your ESG programme or creating bespoke training initiatives, we ensure your ESG approach is understood, embedded, and actively adopted across the portfolio.