Where capital meets conscience.
As environmental, social, and governance (ESG) considerations become increasingly central to investor decision-making, private credit managers are exploring ways to align financial performance with responsible, sustainable impact.
While private credit has traditionally been viewed through the lens of yield, returns, and asset security, a new dimension is emerging, one that aligns capital allocation more closely with social outcomes.
Alongside ESG integration, many investors are also seeking alignment with ethical investing principles, prioritising funds that reflect their personal values, whether that’s social justice, environmental sustainability, or meaningful local impact.
With its tailored structures and ability to deliver real-world impact, private credit is well positioned to meet this growing demand while maintaining the strong fundamentals expected of a high-performing fund.
The rise of ESG in private credit
More and more, investors are placing greater emphasis on ESG when shaping their portfolios.
While this focus was once concentrated in other asset classes, it’s now beginning to shape private credit too, as fund managers explore how ESG can be meaningfully integrated into their investment frameworks and performance objectives.
There are a number of ways private credit can align with ESG. This could include ESG-linked loan structures that incentivise ethical business models, such as offering more flexible terms for borrowers who meet specific ESG benchmarks. Other options include aligning fund performance and charitable contributions, embedding social outcomes directly into the structure of the fund.
Given the bespoke nature of private credit and the lack of standardised benchmarks, integration approaches vary widely across the market. As noted by the UN Principles for Responsible Investment (UN PRI, 2023), managers are developing their own frameworks to incorporate ESG factors in a way that fits their performance and lending strategies.
Still, the direction is clear: responsible capital is becoming the expectation, not the exception.
A recent EY report reinforces this shift, stating that integrating ESG into private debt is not only a moral imperative but a strategic necessity, with it expected to become standard practice across the sector (EY, 2024).
Capspace’s approach to impact
At Capspace, we believe private credit can, and should, be a force for good.
Our lending strategy is grounded in commerciality, secured by real property and business assets, and focused on helping Australian businesses grow and contribute to a stronger economy. Just as importantly, we’re committed to creating positive impact beyond the transaction.
One example is Most Important Meal, a charity we founded to tackle food insecurity among school children. Each week, the program delivers fresh, nutritious meals to students across Sydney who would otherwise go without. It’s a school-led program that supports learning, wellbeing, and a stronger start to the day.
We’ve also partnered with Eat Up Australia as their official fruit supplier, sharing a commitment to ensure no child starts the day hungry. In Term 1 of 2025, we contributed over 30,000 pieces of fruit to students who need them most.
And with a percentage of the Capspace Private Debt Fund’s monthly gross earnings directed towards charitable and community initiatives, the more we grow, the more we give back. We measure our impact not just in dollars returned, but in tangible outcomes, from the number of children fed each week to the long-term success of SMEs we support.
Rather than treating ESG as a checkbox, we view it as an extension of our values. Through our charity work, partnerships, and sponsorships, we’re building a culture of care, responsibility, and giving back that reflects our lending and investment approach: human, transparent, and long-term.
As ESG and private credit evolves, we’ll continue to explore opportunities to embed responsible practices directly into our performance strategy. It’s part of our belief that ethically aligned success can deliver better outcomes for both investors and borrowers.
Looking ahead
As the private credit market matures in Australia, ESG and sustainable impact are expected to play a greater role in how capital is managed and allocated. Rising investor expectations are driving greater demand for transparency and accountability. In this environment, sustainable impact and performance are no longer seen as competing priorities but rather as complementary forces.
At Capspace, we’re proud to be part of that evolution. Whether it’s supporting ESG initiatives, backing borrowers who contribute to economic growth, investing in community impact, or building long-term relationships based on trust, we believe making an impact and building wealth should go hand in hand. As impact and performance become increasingly interconnected, we see opportunity in embracing this shift and driving it forward.
Why investors choose Capspace.
At Capspace, we’ve built a reputation as a leader in the private debt space, specialising in short-term commercial and business lending solutions for Australian small, medium and emerging businesses. Our focus is on supporting businesses with the capital they need to thrive, while delivering strong, risk-adjusted returns for our investors.
Here’s what sets us apart.
- Experienced leadership and expertise. Our team is led by four senior industry professionals with over 100 years of combined experience across global finance, law, and property, and a proven track record in private debt.
- Consistent and reliable returns. Since inception, we’ve delivered stable returns through a disciplined approach to risk management.
- Security. Loans are secured by real property, business assets, and directors’ personal guarantees.
- Transparency. We provide clear visibility into where your money is invested, with regular reporting and independent third-party audits of secured assets.
- Regular income. Our private debt fund offers consistent monthly interest payments, providing predictable cash flow.
- Enhanced liquidity. Our fund is diversified across multiple projects and industries, offering flexibility and access to funds when needed.
- Personalised service. No matter the level of investment, we take the time to understand your goals. Our approach is grounded in clear communication and long-term relationships tailored to your individual needs.
- Alignment with investor values. We prioritise responsible lending and align our strategy with the principles of our clients.
- Innovation and agility. We adapt to market conditions, identifying high-quality opportunities that deliver value.
*Past performance is not indicative of future results. Investors should consider their own objectives and risk tolerance before investing.
To learn more about Capspace’s approach to private debt, reach out to our investment team.
Stay updated with the latest insights by subscribing to our monthly newsletter.
