Date of Award

2019

Degree Name

Bachelor of Arts (BA)

Department

Environmental Studies

Advisor(s)

John van Buren

Abstract

This paper addresses the relationship between the American private equity industry and environmental sustainability. The connection between large financial industries and the environment is one that is often viewed negatively, especially in terms of private equity. As an industry that measures success with exponential economic growth and gaining the largest financial returns, environmental impacts are often sidelined. This paper explores the potential private equity has to incorporate environmental sustainability into the core of its business. Chapter 1 lays out the fundamentals of how the Private Equity industry operates. It also establishes what has caused firms to begin to adopt sustainability. Data from Ernst & Young’s report “Understanding PE’s Impact on the Community” creates a baseline for this section. Chapter 2 employs history to understand the evolution of the relationship between private equity and sustainability. This is done by recounting the development of corporate philanthropy, corporate social responsibility, and corporate sustainability. Chapter 3 establishes where current private equity firms stand on sustainability by examining their current practices. This is done through using principles of sustainable business outlined in different sustainability reporting systems. Examined are the four largest private equity firms in America: Blackstone, Warburg Pincus, The Carlyle Group and KKR. Chapter 4 identifies common missteps in behavior among private equity firms from a sociological perspective. Lastly, chapter 5 concludes by proposing sustainable solutions that private equity firms can incorporate into their operations and into and their portfolio companies.

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