Responsible Investment & ESG

As sustainability and finance regulations converge, Australian private equity firms face a growing imperative to embed environmental, social, and governance (ESG) and responsible investment (RI) practices across the investment lifecycle. The introduction of the Australian Sustainability Reporting Standards (ASRS) and the Australian Sustainable Finance Taxonomy will make sustainability considerations as material as financial performance—impacting both portfolio companies and private equity managers themselves.

With phased implementation beginning in FY2025, the ASRS introduces new expectations for climate-related disclosures, assurance, and governance, aligned with international standards. In parallel, the Sustainable Finance Taxonomy will define what constitutes sustainable economic activity, providing a consistent framework for capital allocation, fund classification, and portfolio alignment. Together, these developments are set to influence how private equity firms assess, manage, and report sustainability performance across their funds and investments.

For Australian private equity firms, this dual shift means rethinking how ESG and responsible investment principles are integrated from screening and due diligence, through active ownership and stewardship, to exit strategy and disclosure. Strengthening ESG practices is no longer optional—it is essential to maintaining credibility with investors, managing regulatory risk, and identifying new sources of long-term value creation.

The &BLOOM Responsible Investment: Australian Perspectives on Private Equity Practices Guide provides a practical framework to support this transition. It helps private equity managers understand the implications of the ASRS and the Sustainable Finance Taxonomy, integrate ESG and responsible investment principles into investment decision-making and portfolio management, and build a credible roadmap toward compliance, transparency, and value creation in a changing regulatory landscape.