How are PRI & Bain & Co Boosting Sustainable Firm Creation?
In late 2024, the Principles of Responsible Investment (PRI), together with Bain & Company and NYU Stern Center for Sustainable Business collaborated on one of the largest global projects on value creation through sustainability to date.
More than 400 investors were engaged through a world-wide survey, a series of one-to-one interviews and regional workshops across Africa, Asia, Europe and Latin and North America.
Embedding ESG for value
Sustainability is no longer only as a moral imperative, it's now a strategic lever for value creation in private markets.
According to a landmark report by the PRI, firms that effectively integrate sustainability into their investment strategies can achieve up to 6–7% uplift in exit multiples and a 6% increase in revenue from portfolio companies (PortCos).
Yet, while 64% of investment firms see sustainability as critical to their strategy and operations, only a minority can clearly quantify its financial impact.
“A recurring challenge we hear from our private markets signatories is the lack of actionable guidance and difficulty in linking sustainability initiatives to financial outcomes,” says David Atkin, CEO of PRI.
“Addressing this challenge is critical, to strengthen the investment case for responsible investment through implementation of effective sustainability strategies."
The gap lies in execution: turning intention into action requires more than policy, it needs a robust operational framework.
The Sustainability Value Creation (SVC) framework
The SVC framework addresses this execution gap by offering an intrinsic guide to embedding sustainability throughout the investment lifecycle.
It operates on three levels:
- Investment Firm Level: Integrate sustainability into due diligence, value creation planning and exit strategy.
- Portfolio Company Level: Prioritise material ESG topics with measurable business drivers (e.g. energy use, labour practices, product innovation).
- Organisational Enablers: Ensure leadership buy-in, data-driven KPIs, aligned incentives and proper governance structures.
Case studies from firms like Apollo Global Management and Warburg Pincus demonstrate practical applications of this model.
Apollo, for example, creates decarbonisation roadmaps within 3–6 months post-acquisition, linking implementation to executive compensation and ESG KPIs.
Financial gains and risk mitigation
The report outlines a variety of value drivers:
- Cost savings via energy efficiency and circularity
- Revenue growth through sustainable product innovation
- Risk mitigation by addressing regulatory exposure and reputational threats
- Multiple uplift at exit from improved ESG credentials.
PortCos that invest in employee health and safety, for instance, can reduce downtime and insurance costs, while also improving retention.
Meanwhile, those that improve customer trust through transparent ESG reporting and product safety gain competitive edge and pricing power.
Next steps for firms
To unlock full sustainability value, the report urges firms to carry out multiple steps.
The PRI report states firms should develop materiality assessments and link ESG outcomes to financial KPIs as well as align internal teams (deal, ops and sustainability) under a collaborative and shared roadmap.
It is recommended that ESG metrics are embedded into investment and IC memos.
Firms are also advised to prepare for an early exit by integrating ESG performance into valuation stories.
PRI and its partners plan to follow this foundational framework with detailed playbooks, methodologies and case studies to guide practical implementation.
Sustainability is no longer a bolt-on or compliance exercise.
When properly integrated, it becomes a core lever of value creation, helping firms future-proof their investments and deliver strong financial and societal returns.
With firms like Apollo, CVC, and Warburg Pincus showing the way, the private markets industry has a blueprint for turning ESG from aspiration into performance.
