The ESG Power of the Board Seat - Comparative case studies of how private equity firms implement ESG strategies within their portfolio companies and manage them through the use of control systems

Sammanfattning: This thesis aims to investigate how private equity firms use control systems to implement ESG-focused business activities within their portfolio companies. The chosen method was comparative case studies, with interviews and documents from two private equity firms. Using Simons' Levers of Control as a theoretical framework, we found that informal and frequent communication may be more important in majority equity arrangements for ensuring strategy implementation in portfolio companies than has previously been recognized. Additionally, our findings suggest that company owners place less emphasis on ESG integration into formal belief systems compared to previous research. Furthermore, our data revealed that ESG is incorporated into the management incentives implemented by PE firms to align interests, which has not been emphasized in earlier research.