Less Than Half of Limited Partners Believe PE Firms Effectively Integrate Climate Analysis into Investment Decisions

New research reveals climate analysis has become less of an ESG reporting exercise and more of a core investment discipline, with LPs increasingly expecting GPs to demonstrate how climate drives value creation, portfolio performance and exit outcomes 

Cambridge, UK – August 10, 2026: Private equity firms are under increasing pressure from Limited Partners (LPs) to demonstrate how climate considerations shape investment decisions, create portfolio value and improve exit outcomes, but they are still not doing so effectively, new research has revealed.  
 
That’s according to a new report from climate and nature analytics firm Risilience, which found that, despite climate becoming an increasingly important investment consideration, fewer than half (42%) of LPs believe GPs effectively quantify climate opportunities within their investment decisions. Meanwhile, only just over a third of LPs (35%) believe climate risks are being adequately quantified financially by GPs. 
 
The findings, published in Climate and Capital 2026: Unlocking Strategic Value from LP Insights, are based on a survey of 526 senior LP decision-makers across North America, the UK and Europe, and point to a structural shift in investor expectations. Rather than viewing climate as a compliance or ESG reporting exercise, LPs increasingly expect it to become a core component of underwriting, portfolio management and value creation. 
 
The report argues that the market has reached an inflection point. While climate reporting has become commonplace, LPs are now asking a fundamentally different question: not what GPs are measuring, but how those insights are being used to improve investment performance and protect returns. 
 
The research shows investors are looking for evidence that climate analysis is embedded throughout the investment lifecycle. This includes informing acquisition decisions, identifying operational value creation opportunities during ownership and demonstrating how climate-related improvements contribute to stronger exit valuations. 

“The private equity market has moved beyond treating climate as a reporting obligation,” said Angela Brown, CEO at Risilience. ”LPs increasingly want to understand how climate analysis is influencing investment decisions, creating value across portfolios and ultimately contributing to financial performance. 

“That requires a very different level of analysis. It’s no longer enough to demonstrate progress against ESG metrics; investors increasingly expect climate insights to be integrated into the same financial decision-making processes that determine investment quality and long-term returns.” 

The findings suggest many GPs are still adapting to this shift. While 97% of LPs say climate engagement is driving measurable behavioural change among GPs, investors are simultaneously raising expectations around the sophistication, consistency and financial relevance of climate analysis. 
 
Increasingly, LPs also expect greater transparency and verification. Eight in ten respondents said they now undertake some form of verification of climate-related claims made by GPs, reflecting a broader move away from relying solely on self-reported ESG disclosures. 
 
The report, available here, also highlights that LPs’ expectations are becoming more diverse rather than converging around a single reporting framework. Investors now want a combination of robust governance, quantified climate risks and opportunities, evidence of operational value creation and clear links between climate analysis and financial outcomes, making climate capability an increasingly important differentiator between managers. 
 
It concludes that private equity is entering a new phase in which climate analysis is evolving from a sustainability function into a core investment capability. Firms able to demonstrate how climate considerations drive commercial outcomes will be best placed to meet LP expectations and compete for future capital. 
 
Risilience supports private equity firms to identify, assess, and manage climate and environmental risks within portfolio companies, driving sustainable value creation and mitigating potential liabilities. Its latest product release features Riise IQ, an AI-powered solution for generating instant, board ready insights, fully updated science backed transition risk models and granular, business unit level analysis, built to help finance, sustainability, and risk teams quantify, plan, and act on the financial impacts of climate and nature-related risks and opportunities. 

About Risilience

Risilience, a leading climate risk and analytics software provider, is trusted by corporates and financial institutions worldwide. Its award-winning platform, Riise, translates complex environmental data into financially quantified insights, helping businesses accurately quantify, plan for, and mitigate climate and nature-related risks. By combining advanced AI-driven modeling with enterprise-grade analytics, Risilience enables organizations to seamlessly embed sustainability into core financial and strategic decision-making.

Founded in 2021 as a spin-out from the Cambridge Centre for Risk Studies at the University of Cambridge Judge Business School, Risilience has offices in the UK and US and is backed by a team of multidisciplinary experts and partners.

In 2023, Risilience was awarded the prestigious King’s Award for Enterprise in the category of Innovation for their work in climate risk analytics. This recognition highlights their technological advancements in helping companies assess and manage climate-related risks, aligning with their reputation as a top firm in the Verdantix green and sustainability software benchmark.