ESG Disclosures in the Private Equity Industry

107 Pages Posted: 15 Nov 2022 Last revised: 3 Jan 2024

See all articles by Jefferson Kaduvinal Abraham

Jefferson Kaduvinal Abraham

London Business School

Marcel Olbert

London Business School; ZEW – Leibniz Centre for European Economic Research - Corporate Taxation and Public Finance Research

Florin P. Vasvari

London Business School

Date Written: August 15, 2023

Abstract

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 suggest an increasing trend in these disclosures over time. Multivariate analyses show that the demand for sustainable investments from PE fund investors and mandatory ESG disclosure regulations aimed at publicly listed firms in countries where PE portfolio companies operate are significant determinants of PE firms’ ESG disclosures. Leveraging data on PE firms’ portfolio companies, we document evidence implying active ESG outcome improvements when PE firms provide more ESG disclosures. Overall, these findings indicate that the actions of PE firms align with their ESG disclosures.

Keywords: Private Equity, Financial Reporting, ESG Disclosures, Voluntary Disclosures, ESG Investing, Value Creation, Fund Performance

JEL Classification: M41, G32, G34, G12

Suggested Citation

Abraham, Jefferson Kaduvinal and Olbert, Marcel and Vasvari, Florin P., ESG Disclosures in the Private Equity Industry (August 15, 2023). TRR 266 Accounting for Transparency Working Paper Series No. 132, Available at SSRN: https://ssrn.com/abstract=4265171 or http://dx.doi.org/10.2139/ssrn.4265171

Jefferson Kaduvinal Abraham

London Business School ( email )

Sussex Place
Regent's Park
London, NW1 4SA
United Kingdom

Marcel Olbert (Contact Author)

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

ZEW – Leibniz Centre for European Economic Research - Corporate Taxation and Public Finance Research ( email )

United States

Florin P. Vasvari

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

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