At Cooper Parry, our experience of being private equity-backed has been a transformative journey. It’s driven both our growth and also deepened our commitment to sustainability. From day one, we’ve recognised the critical importance of aligning with Environmental, Social, and Governance (ESG) good practice principles. And this alignment has been central to our success.
As a business, we believe that true success isn’t just measured by financial returns but by our positive impact on society and the environment.
This belief inspired us to pursue and achieve B Corp certification. Proving our commitment to high standards of social and environmental performance. A big shoutout to our incredible Sustainability team for making it happen — we’re proud of this achievement. It’s a process built on challenge.
Through this process, we’ve seen first hand how prioritising sustainability can strengthen our business, enhance our reputation, and ensure compliance with the ever-evolving expectations of business investors and stakeholders alike.
ESG: A GAME-CHANGER FOR BUSINESSES SEEKING FUNDING
Strong ESG initiatives can give you a serious competitive edge if you’re a business looking to secure funding, whether equity or debt. Investors and lenders are increasingly on the lookout for companies that not only deliver financial returns but also make a positive impact on the world.
When your business prioritises ESG, it signals to investors that you’re forward-thinking, resilient, and better equipped to navigate future challenges. This makes you a more attractive investment, giving you a better chance of securing the funding you need to grow and thrive.
In today’s market, ESG isn’t just a nice-to-have — it’s a must-have for standing out and winning over investors and lenders. Taking sustainability head-on helps mitigate the physical impacts of climate change, like supply chain disruptions and demonstrates that your business is proactive and committed to doing the right thing
EXPERT INSIGHTS: THE POWER OF ESG IN PRIVATE EQUITY
By working with businesses that have the best potential, private equity (PE) investors can unlock a wide array of financial benefits,
In our experience we’ve seen that ESG compliance isn’t just a buzzword — it’s a game-changer in private equity investing. PE investors see possible investments needing to have strong ESG credentials as non-negotiable.
RESILIENT COMPANIES CAN MEAN STRONGER RETURNS
First off, companies that follow ESG practices tend to be more resilient. What does that mean?
They’re better at handling the ups and downs of the market, leading to more stable and often stronger financial performance. This resilience makes them less risky investments, which in turn draws in a broader range of investors — especially those who are big on sustainability.
HIGHER VALUATIONS AT EXIT
When it’s time to sell, ESG-compliant companies often command higher valuations. Why?
Because they’re more attractive to both the public markets and potential buyers, companies and business investors. So, while ESG compliance is about doing the right thing, it’s also a very smart financial move that can seriously boost your returns.
Business INVESTOR PREFERENCES ARE SHIFTING
The landscape is changing, and sustainable, ethical investments are taking centre stage. Limited Partners (LPs) are increasingly pushing PE firms to only invest in companies with strong ESG credentials. Corporate acquirers are also following suit. Why?
Because companies that prioritise ESG are better prepared to handle everything from shifting regulations to societal expectations and environmental challenges.
ESG DUE DILIGENCE, THE NEW NORM
As a result, prospective buyers are typically undertaking extensive ESG due diligence before a deal. PE firms are putting more effort into ESG due diligence when scouting for new investments. This extra layer of scrutiny ensures that the companies they back are in line with the values and expectations of their investors, making the entire fund more attractive. Potential investors are testing PE Firms on their approach to ESG as part of fundraising.
Future-Proof Investment Strategies
Aligning with ESG criteria is quickly becoming a key part of investment strategies for private equity firms. Investment Committees are now closely examining the ESG credentials of potential investments before making decisions to invest. This focus not only helps avoid regulatory and reputational risks but also positions the firm as a leader in the growing field of sustainable investing.
So, what’s the big payoff?
PE investors who prioritise ESG are likely to see more capital flowing into their funds, as LPs are eager to support firms that contribute to a sustainable and ethical future. In the long run, integrating ESG principles into your investment strategies isn’t just about meeting investor demands — it’s a proven recipe.
So, here’s a practical to-do action list to get your business ESG ready and attract business investors.
5 PRACTICAL ESG TIPS
1. Measure and Reduce Your Carbon Footprint Annually
Track your carbon footprint and make it a priority to lower aim for net zero.
2. Get Your Footprint Verified
Ensure your carbon data is verified, making it credible and trustworthy.
3. Embed ESG into Everyday Business
Develop and implement policies that integrate ESG into your daily operations, such as sustainable procurement, diversity and inclusion (D&I), and energy policies.
4. Educate Your Team
Make sure your workforce understands the importance of ESG and how they can contribute.
5. Address Sustainability Risks and Opportunities
Identify and tackle potential risks and opportunities related to sustainability within your business.
Beware, it can almost be considered ‘trendy’ to be green. That’s why we see so many cases of greenwashing — companies trying to appear sustainable without really putting in the work. Customers and potential employees are drawn to sustainable companies, but it can be hard to stand out in an already saturated market. That’s where B Corp certification comes in. It proves you’re not just another green washer but genuinely committed to ESG, helping you rise above the crowd.
LET US SUPPORT YOUR ESG JOURNEY
Already on the path but eager to attract top-tier business investors? We’ve got you covered, whether it’s calculating your carbon footprint with our Carbon Footprint Finder or securing third-party assurance. This is part of a wider range of services we can provide to make sure your business is ready for the next stage of development. Whether you’re looking for further investment or are preparing for exit readiness.
We have extensive experience supporting Private Equity (PE) firms, with market-leading expertise across Corporate Finance, Transaction Services, and Transaction Tax, offering a comprehensive solution for all your M&A needs.
Our Exit Readiness Guide, shaped by years of collaboration with business owners and presented by our team, is an invaluable resource for those preparing to sell, covering crucial factors such as business valuation, succession planning, and identifying potential buyers.
Additionally, as sustainability becomes increasingly important to attract investors, our sustainability team are ready to assist you. No matter where you are on your ESG journey, our new CP sustainability services are here to help. If you’re just starting out and unsure where to begin, our ESG Diagnostic Tool and Reporting Support will guide you every step of the way.
At Cooper Parry, we’re not just part of the sustainability conversation—we’re leading it, with a firm belief that doing good is good business.
Ready to take the next step? Let’s get started with a conversation. Get in touch today.
