Blackstone asks CEOs to take ESG matters to their boards for the first time
Investment group Blackstone has asked its top private equity staff to report environmental, social and governance (ESG) matters to their boards for the first time ever.
Executives in companies controlled by the group’s private equity arm will up Blackstone’s sustainability, as investors are increasingly wary of the impacts companies have on the environment and workers, according to a letter seen by Reuters.
As the world’s largest manager of alternative assets, Blackstone said that CEOs should report on climate risks, environmental certifications such as green building ratings, diversity among employees and commitments to human rights.
“Environmental, social and governance factors are attracting greater focus globally and demand careful attention on your part,” Blackstone’s private equity business heads wrote to the portfolio company CEOs.
“We believe providing transparency for your directors on ESG-related matters is a best practice.”
Funds that manage money considering environmental, social and governance factors have surged in popularity in recent years, matching growing pressure on investors to respond.
Some Blackstone portfolio companies have already been reporting on ESG matters, but Blackstone’s latest move will mean the practice will be standardised.
The New York-based firm’s success with ESG reporting in its real estate division has led the firm to expand the effort across private equity, a Blackstone spokeswoman said.
The group plans to take the reporting from its portfolio companies to develop standards and best practices across the firm, the spokeswoman added.
Last week, Blackstone announced a string of ESG-based new hires, who are set to implement diversity and sustainability initiatives across its businesses.
The firm has yet to decide what sustainability reporting framework is the best one to use, a source told Reuters.