ESG Disclosures in the Private Equity Industry

This paper offers the first systematic evidence on environmental, social and governance (ESG) disclosures provided by a large global sample of private equity (PE) firms. Using historical websites from 2000 to 2022, we develop and validate a novel dictionary-based measure of voluntary PE firm ESG disclosures. Descriptive statistics reveal an increasing time trend in these disclosures, with social topics becoming as important as environmental topics recently. Multivariate analyses show that the demand for ESG information from fund investors is a significant determinant of PE firms’ ESG disclosures. Leveraging data on PE firms’ portfolio companies, we document that more PE firm ESG disclosures are associated with better environmental, social and governance outcomes at the portfolio company level, suggesting that voluntary ESG disclosures align with real actions for the average PE firm.

Keywords: Private Equity, Financial Reporting, ESG Disclosures, Voluntary Disclosures, ESG Investing, Sustainable Investment M41, G32, G34, G12

JEL Classification: M41, G32, G34, G12

Suggested Citation: Suggested Citation

Abraham, Jefferson K. and Olbert, Marcel and Vasvari, Florin P., ESG Disclosures in the Private Equity Industry (July 19, 2024). Journal of Accounting Research, forthcoming, Available at SSRN: https://ssrn.com/abstract=4265171 or http://dx.doi.org/10.2139/ssrn.4265171