This article originally appeared on PENews.com.

In the few short years since environmental, social, and governance (ESG) investing first appeared on the scene, the private equity industry has tended to view it defensively—something “good to do” in addition to a fund’s normal business of buying and shepherding companies.

Now it is becoming a competitive weapon, in Europe especially.

As we explored in our 2021 Global Private Equity Report, forward-thinking private equity firms increasingly recognize that ESG has become central to how companies delight customers, gain market share, engage employees, and create the best work environment.