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- Title
Think Global, Invest Responsible: Why the Private Equity Industry Goes Green.
- Authors
Crifo, Patricia; Forget, Vanina
- Abstract
The growth of socially responsible investment (SRI) on public financial markets has drawn considerable academic attention over the last decade. Discarding from the previous literature, this article 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 SRI on public financial markets and the impetus of large conventional actors. Hypotheses 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 socially responsible investing is characterized by investor engagement 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 socially responsible practices. Evolution of the movement and future research paths are proposed.
- Subjects
FRANCE; PRIVATE equity funds; GREEN business; ETHICAL investments; SOCIAL responsibility of business; CORPORATE finance; LEVERAGED buyouts; AGENCY theory; VALUE creation; RISK management in business; LIMITED partnership; VENTURE capital companies
- Publication
Journal of Business Ethics, 2013, Vol 116, Issue 1, p21
- ISSN
0167-4544
- Publication type
Article
- DOI
10.1007/s10551-012-1443-y