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Last month at the annual Morningstar Investment Conference BlackRock CEO Larry Fink doubled down on the firm’s long-standing commitment to environmental, social and governance standards. He promised that by the end of this year, 100% of its portfolios will integrate ESG metrics, up from 70% at the end of April.

For those following BlackRock and its pursuit of sustainability across its portfolio investments, this announcement may not be a surprise. But what is different this year is that more private equity companies are following suit.

To be sure, private equity companies have been waking up to the importance of purpose, responsibility and transparency for the last several years. Now, though, the pandemic has catapulted these concepts to the top of the agenda.

Anna Grotberg, an associate partner at EY-Parthenon, discussed this new trend at the British Pvt. Equity and Venture Capital Association Ltd. Summit, according to a report by S&P Market Intelligence

Since the start of the pandemic, Grotberg has seen an increased interest in transparency and accountability and in developing ESG policies by private equity firms.

“So my personal opinion, based on the conversations over the past few months, is that this real sense of purpose and responsibility that has been on the agenda is being accelerated right now,” she said, according to S&P Market Intelligence. “We’ve had increasing demand from [limited partners] in terms of transparency and accountability, particularly around [environmental, social and governance] and ESG policies,” she added.

According to Grotberg, private equity companies are four of the world’s 10 largest employers, and they are in a position to drive growth, both in the economy and in society. More of these companies are taking responsible investing and social impact investing seriously. There are currently 700 private equity funds that are signatories to the Principles of Responsible Investing, a UK-based organization that promoted ESG factors in investment decisions.

Investment companies are adopting ESG policies for practical reasons as well. Decreasing utility bills and focusing on energy efficiency are the cornerstones of ESG, and in the light of the pandemic, these policies can be effectual methods of saving.

The National Associate of Real Estate Investment Trusts’ recent ESG report also noted an urgency for REITs to adopt “environmental stewardship, social responsibility and good governance” following the pandemic. While ESG has already been a focus for REITs, in recent years, the significant cost savings, solid tenant and community engagement and lasting value-added benefits has proven the effectiveness of the model. As a result, more REITs are focusing on ESG. In 2019, 89% of REITs report ESG factors publicly, up from 78% in 2018. This has already made a significant impact on the commercial market. REITs own $2 trillion in assets and more than 87 million Americans invest in REIT stock.

REIT activity in ESG shows that this was already a growing trend prior to the pandemic, but the new surge of interest in the private equity arena illustrates that the trend is growing. The Counselors of Real Estate pegged ESG as on of the industries top trends and a growing influence of millennial investors. It recommends that real estate investors should be addressing the trend and developing new ESG policies.