A longstanding divide has separated what investors can reliably know about sustainability in public markets from the far murkier picture available in private markets.
According to ACA Group, public companies have operated for years under mandatory disclosure obligations and voluntary reporting frameworks, producing a rich and well-established base of ESG data accessible through public channels.
Private markets have historically told a very different story. Data providers have patched together profiles of private companies through media scanning, value-chain linkages to publicly listed counterparts, and modelled estimates where direct information simply did not exist. It has been a serviceable workaround, but one that has consistently left private markets analytically constrained and structurally behind.
That gap is now narrowing at speed. AI-enabled workflow tools and more sophisticated data scraping techniques are producing new volumes of information on private companies, to the point where evidence-based sustainability metrics for private names can now rival those available for public ones.
For senior ESG and compliance leaders, this development resets expectations: data scarcity can no longer justify a lighter approach to sustainability analysis or reporting in private markets. At the same time, private markets managers in the US are increasingly directing their fundraising efforts towards a new audience — wealth clients.
Regulatory shifts at the federal level over the past year have cleared the path for broader private markets participation across US wealth segments. Full adoption remains some way off, but the trajectory is unmistakable: access to private market investments is set to expand across all wealth tiers.
That raises a practical question for managers: do wealth clients actually want sustainability-related products? The evidence suggests they do, and that appetite is growing — though it varies considerably by segment.
Morgan Stanley’s 2025 global survey found that 72% of the general population described themselves as very or somewhat interested in sustainable investing, a figure that climbed to 88% among those with more than $100k in investable assets. The generational skew is even more pronounced: 99% of Gen Z and 97% of Millennials expressed interest in sustainable investing, with both cohorts far more likely than Boomers to describe that interest as strong. For private fund managers eyeing younger wealth demographics, those numbers are difficult to ignore.
UBS’s 2025 Global Family Office report adds further texture. Among family offices factoring sustainability into their investment decisions, 46% now see it as a source of attractive opportunity — up from 42% the previous year — whilst those viewing it chiefly as a risk management mechanism fell from 47% to 33%. The framing is shifting from defensive to strategic.
Perhaps the most commercially significant finding for asset managers comes from EY’s 2025 global wealth client research, which revealed that 39% of clients across all segments are interested in values-based investing, yet only 20% report that their adviser has raised the topic with them. That supply gap represents a meaningful opening, particularly as wealth intermediaries increasingly look to compare products on sustainability grounds.
Alongside the demand signal sits a clear education gap: more clients express interest in sustainability products than those who feel confident in their understanding of them. The overall picture is of a market where demand is already running ahead of supply, with generational dynamics suggesting that imbalance will only widen.
Private fund managers looking to capitalise on this environment will need to communicate sustainability in ways that connect with different wealth audiences — and those audiences do not all want the same thing. Drawing on 2025 research findings, mass affluent investors broadly above $100k tend to prioritise values alignment, alongside simplicity and trust as foundational requirements.
High-net-worth individuals above $1m share a similar focus on values alignment, whilst very and ultra-high-net-worth clients above $5m to $10m are typically more interested in identifying greenfield opportunities that connect to philanthropic objectives.
Catering to this range of expectations requires managers to describe sustainability characteristics in a way that is both audience-specific and meaningfully comparable across the market. In practical terms, the two principal options for private markets managers seeking to benchmark and compare ESG fund performance are the ESG Data Convergence Initiative (EDCI) and the Global Real Estate Sustainability Benchmark (GRESB).
Whether EDCI metrics are sufficient to articulate the sustainability story behind a given fund’s performance — or its alignment with specific client values — will depend on the fund. In many cases they will not be, and that shortfall is precisely the problem that emerging data tools are beginning to target. Managers attempting to present sustainability performance in a way that is financially meaningful, competitive on a platform, and tailored to particular investor groups or themes will need more than current benchmarks can offer.
The implications for returns analysis are equally significant. Establishing a credible link between sustainability characteristics and investment performance is inherently complex, and more so in data-thin environments.
As richer datasets emerge through AI-driven processing, more rigorous analytical approaches will become viable — including advanced regression analyses, cross-peer normalisation, and the conversion of raw data into actionable insight. That capability is not on the horizon; it is accessible today for managers prepared to explore it. The missing ingredient is not the data — it is tools with the governance architecture to ensure that data can be trusted.
As wealth segment interest in sustainability continues to build and expectations around disclosure rise, private fund managers should consider where their operations need to strengthen.
Governance of sustainability data is a logical starting point: firms need clear oversight and quality control processes to ensure that the inputs underpinning their sustainability metrics are consistent, traceable, and regularly reviewed. Improving comparability across funds and strategies — by aligning internal metrics to recognised frameworks whilst being honest about the limitations of benchmarks like EDCI — will help managers make a more credible case to sophisticated audiences.
Segment-specific messaging will also matter more as the wealth channel grows. Communications need to reflect how different clients assess sustainability, whether the emphasis falls on values alignment, opportunity identification, or straightforward simplicity. Equipping client-facing teams with clear, confident explanations of sustainability characteristics is equally important, particularly given the education gap between client interest and client knowledge that the research consistently highlights.
Finally, firms should be actively preparing for more demanding analytical expectations. As data availability improves, the ability to normalise inputs, benchmark across peer sets, and interpret results responsibly — without introducing governance risk — will increasingly separate those who can participate meaningfully in wealth-focused sustainability conversations from those who cannot.
Copyright © 2026 RegTech Analyst
Copyright © 2018 RegTech Analyst
