Private equity’s ESG record reveals troubling trend

By Trey Thoelcke Updated Aug 3, 9:08AM EDT · Published Aug 3, 4:08AM EDT

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Private equity’s ESG record reveals troubling trend — © Artem_Egorov / Getty Images

(Mark Hulbert, an author and longtime investment columnist, is the founder of the Hulbert Financial Digest; his Hulbert Ratings audits investment newsletter returns.)

CHAPEL HILL, N.C. (Callaway Climate Insights) — When it comes to persuading companies to become more climate friendly, engagement is a more effective long-term strategy than avoidance.

This has been a persistent theme of mine, and a new study provides yet more support for it. If investors make life too intolerable for a polluting publicly-traded company, either by refusing to invest in its shares or by outright selling it short, the company can respond by going private. At that point, of course, investors have even less ability to even get management’s attention.

In other words, if we keep polluting companies from playing on our playground, they may simply go play somewhere else that is off limits to us.

This isn’t a new worry. But what this new study documents is just how poor private equity (PE) firms’ ESG performance really is. If you thought publicly-traded firms come up woefully short in being climate friendly — and many do — then brace yourself for the even-worse performance of PE firms…

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About the Author Trey Thoelcke →

Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.

Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community. He previously oversaw the 24/7 Climate Insights site, managing editorial operations and content strategy, and currently oversees and creates content for My Investing News.

Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.

Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, overseeing a long-running critique group and moderating workshop sessions at regional conventions. He lives with his family in an old house in the Midwest.