Think Global, Invest Responsible: Why the Private Equity Industry Goes Green

Posted: 25 Aug 2012

See all articles by Patricia Crifo

Patricia Crifo

Ecole Polytechnique, Paris - Laboratoire d'Econometrie; Université Paris X Nanterre - Department of Economics; Center for Interuniversity Research and Analysis on Organization (CIRANO)

Vanina D. Forget

Ecole Polytechnique ParisTech - Department of Economics

Date Written: 2012

Abstract

The growth of socially responsible investment on public financial markets has drawn considerable academic attention over the last decade. Discarding from previous literature, this paper sets up to analyze the Private Equity channel, which is shown to have the potentiality to foster sustainable practices in unlisted companies. The fast integration of the Environmental, Social and Governance issues by mainstream Private Equity investors is unveiled and appears to have benefited from the maturation of socially responsible investment on public financial markets and the impetus of large conventional actors. Hypothesis on the characteristics and drivers of this movement are proposed and tested on a unique database covering the French Private Equity industry in 2011. Empirical findings support that Private Equity responsible investing is characterized by shareholder activism and strategically driven by a need for new value creation sources, increased risk management and differentiation. In particular, results show that independent funds, which need to attract investors, are more likely than captive funds to develop responsible practices. Evolution of the movement and future research paths are proposed.

Suggested Citation

Crifo, Patricia and Forget, Vanina D., Think Global, Invest Responsible: Why the Private Equity Industry Goes Green (2012). Journal of Business Ethics, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2135430

Patricia Crifo (Contact Author)

Ecole Polytechnique, Paris - Laboratoire d'Econometrie ( email )

Route de Saclay
Palaiseau, 91128
France

Université Paris X Nanterre - Department of Economics

Nanterre Cedex, 92001
France

Center for Interuniversity Research and Analysis on Organization (CIRANO)

2020 rue University, 25th floor
Montreal H3C 3J7, Quebec
Canada

Vanina D. Forget

Ecole Polytechnique ParisTech - Department of Economics ( email )

Palaiseau Cedex, F-91128
France

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
457
PlumX Metrics