ESG in Private Debt:
EPM enhances its tools
to better assess sustainability risks
24.11.2025|3 min
Since 2014, LBP AM has embedded ESG criteria into its private debt investment decisions. With the evolution of our proprietary due diligence tool, we are enhancing the identification of material sustainability risks and optimizing their monitoring across the entire investment lifecycle.
LBP AM was among the first to integrate ESG criteria into corporate, infrastructure, and real estate private debt investment decisions as early as 2014.
To assess how counterparties implement responsible practices and contribute to sustainable development within their business models, our investment and ESG teams have developed tailored diligence and scoring grids for each asset class. These grids are based on the four pillars of our proprietary ESG analysis tool, GREaT:
- Responsible Governance
- Sustainable Management of Resources
- Energy Transition
- Territorial Development
These evaluation frameworks are regularly updated to refine the analysis, maintain methodological consistency with the AGIR rating model used for listed assets, and reflect evolving sustainability standards and market practices among private market counterparties.
Strengthening ESG methodologies: risk mapping and calibrated due diligence
A significant update was introduced in autumn 2025 to our ESG due diligence and scoring methodologies for investments in corporate, infrastructure and real estate private debt, aimed at improving the identification and assessment of material environmental and social risks specific to each investment project. This update includes:
- Development of internal environmental and social risk-maps: Using reference data sources such as ENCORE, WWF Risk Filter, and Human Rights Watch, these maps help our experts identify key risks in corporate and infrastructure private debt projects.
- Calibrated due diligence based on risk materiality: Targeted questions enable to deep dive on the management of significant risks, while diligence on less material issues has been streamlined for counterparties. For real estate debt, due diligence now formally accounts for asset typologies (office, logistics, retail, residential) and their lifecycle stage (operational or under renovation/construction). Certain criteria have been refined, and the tool now allows modulation of due diligence based on data availability and completeness.
- Updated weightings to reflect the materiality of criteria within the scoring model.
- Enhanced ESG presentations to the investment committee,that highlights sustainability risks, strengths, and monitoring points.
These improvements enhance the value we deliver to our LPs and counterparties by strengthening risk management across our portfolios, both during initial due diligence and throughout the investment period, through improved analysis, discussion and monitoring of identified material issues.