Bowing to concerns from some of their big investors, 13 of the largest private equity firms on Tuesday will agree to a United Nations initiative for socially responsible investing, according to an industry trade group.
The private equity industry has come under increased criticism in recent years from labor unions and the governments of several countries over its members’ management practices.
Investors like the California Public Employees’ Retirement System and the California State Teachers’ Retirement System urged the council in 2007 to adopt a version of the United Nations’ Principles for Responsible Investing, which encourages big investors to use environmental, labor and governance principles into their investing guidelines, The New York Times’s Michael J. de la Merced reported.
This is a major step forward and it makes good business sense in the end, because the only way businesses can be successful over the long term is if they function within a sustainable environment.