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By Raphaël BETTI, Assurance Partner, Climate Change and Sustainability Services Leader Marie-Laure MOUNGUIA, Partner, Private Equity Private Debt, EY Luxembourg
The strong development of the private debt market combined with the increasing appetite from stakeholders for impact investing, and the recent EU Regulations have led to a variety of mechanisms ensuring proper alignment of financial interests with Environmental, Social, and Governance (ESG) principles. In this respect, the incorporation of sustainability key performance indicators into the carried interest structures of private debt funds is an evolving practice designed to align financial incentives with social impact goals. This approach is gaining traction in impact investing, especially...
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