Think Global, invest responsible: why the private equity industry goes green

Patricia Crifo (1, 2) , Vanina Forget (1)

1 X-DEP-ECO - Département d'Économie de l'École Polytechnique
2 UPN - Université Paris Nanterre

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 responsiblen 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.

Mots clés: Corporate Finance; Corporate Social Responsibility; France; Multi-factorial Analysis; Private Equity; Shareholder Activism; Socially Responsible Investment; Strategy.; Strategy

Domaines: Finance quantitative [q-fin.CP]

Patricia Crifo, Vanina Forget. Think Global, invest responsible: why the private equity industry goes green. 2012. ⟨hal-00672034⟩