Private equity firms have acted to counter suggestions that their
increasing influence poses a threat to corporate social responsibility.
Two heads of private equity firms last month publicly pledged more
openness, while arguing that there is no reason their business model is
necessarily incompatible with the CSR policies pursued by listed
companies.
Damon Buffini, managing director of Permira, Europe’s biggest private
equity group, said he acknowledged that ‘there has to be more
disclosure’ to allay concerns that private equity firms are only
interested in short term gains. He offered to meet union leaders in
Britain to discuss their widely publicized concerns that private equity
fails to take its social responsibilities seriously.
Permira also announced that the hotel chain Travelodge, which it owns,
is to recruit a director of environmental sustainability to develop a
social and environmental strategy for the company.
In the US, David Rubenstein, co-founder of the Carlyle Group, one of
the largest private equity firms, said he hoped the recently created
Private Equity Council in Washington DC would help firms like his to
show they are socially responsible.
The industry responses came shortly before the Work Foundation produced
figures that show private equity firms involved in management buy-ins
had cut jobs by an average of 18 per cent over six years, and the
workers at the buy-in companies were £231 ($455) a year worse off
compared with other private sector employees. The foundation drew on
data on 1350 private equity deals dating back to 1999 to support its
claims.
