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

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Author Info

  • Patricia Crifo

    (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X, UP10 - Université Paris 10, Paris Ouest Nanterre La Défense - Université Paris X - Paris Ouest Nanterre La Défense - Ministère de l'Enseignement Supérieur et de la Recherche Scientifique)

  • Vanina Forget

    (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X)

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 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.

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Bibliographic Info

Paper provided by HAL in its series Working Papers with number hal-00672034.

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Date of creation: 20 Feb 2012
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Handle: RePEc:hal:wpaper:hal-00672034

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Related research

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

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References

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Cited by:
  1. Patricia Crifo & Vanina Forget & Sabrina Teyssier, 2012. "The price of unsustainability: An experiment with professional private equity investors," Working Papers hal-00757203, HAL.

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