ESG: The Insights You Need from Harvard Business Review

4 PRIVATE EQUITY SHOULD TAKE THE LEAD IN SUSTAINABILITY

by Robert G. Eccles, Vinay Shandal, David Young, and Bénédicte Montgomery

Despite their reputation in the 1980s as corporate raiders, most private equity (PE) firms attempt to improve the performance of their portfolio companies through better corporate governance. Historically their business model has been to create value by sharpening the focus and oversight of largely ignored business units inside conglomerates or poorly managed private companies, such as dysfunctional family-run businesses. But although the G in “environmental, social, and governance” has been important in the PE industry from the outset, the E and the S have been virtually nonexistent. The industry has been content ...