Private equity faces calls for environmental disclosure

Private equity firms are facing growing pressure to disclose information about their environmental performance following the publication this week of the Walker Review into reporting practices among private equity firms.

The review – which includes guidelines demanding greater "disclosure and transparency" from private equity groups about their financial activities – requires firms to produce business reviews detailing "the main trends and factors likely to affect the future development, performance and position of the company's business".

These are to include "information about environmental matters (including the impact of the company's business on the environment)", as well as details of social and community issues and employee relations.

A spokesman for the TUC welcomed the move, claiming it would increase pressure on private equity-controlled firms to enhance their environmental performance. "We support quoted companies disclosing their environmental policies and are glad to support private equity firms doing the same," he said.

However, details about the precise environmental metrics private equity groups will have to disclose remain sketchy, with no clear definition offered in the review for what constitutes "environmental matters".

It is also unclear how seriously the private equity sector will take the guidelines requirements. Several major private equity firms declined to comment on the implications of the report's calls for greater environmental disclosure, while one respondent was unaware that the review even contained information on environmental disclosure.