One year after the California Public Employees’ Retirement System and Carlyle Group launched their initiative to collect sustainability data on private equity, 215 investors joined us to see how they will shape future earnings. trying to decide.
Information is gathered from over 2,000 companies owned across investor portfolios. And while progress has been made in some areas of environmental, social and governance efforts, others have stalled.
BCG, a consultant hired to compile the data, found that the industry lags significantly in the number of women on boards compared to the general public. Private companies were able to create jobs at a faster pace and reduce their greenhouse gas emissions more quickly than public companies.
Meg Starr, global head of Carlyle’s impact division, said in an interview, “We have the richest private market dataset ever.
ESG improvements can ultimately drive financial returns, according to a BCG report. For example, private companies with women on boards show higher growth rates than others, the report says. BCG said it is too early to draw definitive conclusions from the data.
“There are areas where the industry is not doing well,” Starr said. “I think board diversity is a clear message to general partners that this is an area where they can really differentiate.”
On the workforce side, Starr said private equity-backed companies were able to create jobs up to three times faster than public companies.
“PE is often vilified. To paint it in the broadest brushstroke is the idea that acquisitions will come in and destroy jobs,” she said. It’s very different from what you have.”