Bellon, Aymeric. "Does Private Equity Ownership Make Firms Cleaner? The Role Of Environmental Liability Risks". SSRN Electronic Journal. June 12, 2020. https://doi.org/...

Private equity-backed firms increase pollution in locations and periods where environmental liability risk is relatively low while decreasing GHG emissions and pollution where regulatory risks increase.  This study shows that private equity (PE) ownership leads to a 70% reduction in the baseline rate of toxic pollution.  Exploiting specific private equity deals from the energy industry, the study found that PE control and incentive to sell the firm are the main drivers behind the results.  Reducing GHG emissions and toxic pollution reduces environmental liability risk and maximizes PE exit value by making the portfolio company attractive to more buyers.

Posted on 03/12/21

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