Global Investment Firm
With $435 billion of assets under management, Carlyle’s purpose is to invest wisely and create value on behalf of our investors, portfolio companies, and communities.
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As a global investment firm we work together to create long-term value for our investors, companies, shareholders, people and communities.

Notices & Disclaimers LP Login Annual Report 2023 2024 ESG Report Q2 2024 Financial Results

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Better businesses result in better outcomes.

View our value creation case studies

Cardinal Renewables

Developing a pipeline of US solar projects

Jeanologia

Reducing water and chemical usage in denim processes

Weiman

Greening cleaning supplies

HireVue

Using video interview technologies to reduce unconscious bias

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Anatomy of a Deal

Anatomy of a Private Equity Deal:

ESG integration in action

Integrating ESG data, analysis, and action helps us drive value across four major components of our equity investment process

Investment Deal Sourcing

In a changing world we are constantly evaluating our investment opportunity set, led by the thematic expertise of our specialized investment teams. Increasingly, ESG and impact themes are helping our investors assess investment opportunities from shifts such as:

Emerging growth markets – for example, technologies driving better health outcomes at a lower cost, such as One Medical’s platform, described here

Market disruptions – the electrification of the vehicle fleet, for example, as seen through our Axletech investment in last year’s report here

Changing consumer preferences – growing demand for sustainable and transparent goods and services, as demonstrated through Weiman’s growth in greener cleaning supplies here

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Investment Due Diligence

ESG integration in due diligence is led by our investment teams, with analysis and input from our dedicated ESG experts. We bring in specialized external ESG partners to help dive deeper on specific issues, such as climate risk modelers to help us assess potential physical risks from climate change. We focus on the most material ESG issues for a company and its sector, using the Sustainability Accounting Standards Board (SASB) sector guides as a starting point to focus our diligence. Each buyout investment advisory team includes an analysis of relevant ESG issues in its final investment committee memorandum seeking approval for an investment. Due diligence also provides an opportunity to include discussions of ESG- or impact-related value creation opportunities that may be embedded into a company’s broader value creation plan.

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Investment Period

Once we own a particular portfolio company or asset, we monitor material ESG issues and assess opportunities to generate value from ESG initiatives and growth markets. We support portfolio companies to both evaluate ESG issues related to their businesses and develop their own internal capacity to manage these issues and opportunities, if not already in place. Our goal is to provide distinct resources that allow portfolio companies to develop ESG and impact approaches beyond what they may have otherwise: capital injections to upgrade equipment and advance R&D, support from our dedicated internal ESG professionals, connections to leading experts in ESG issues in their sector, institutional knowledge of best practices and reporting, and the leverage of other firm resources including cross-portfolio collaboration between our companies. ESG data is a core tool we use during the investment period to drive value – we track ESG key performance indicators (KPIs) across our investments for issues which are systemically important (such as diversity of boards and management teams), and several of our larger funds also track bespoke, material ESG KPIs for each controlled portfolio company. You can read more about our approach to ESG data here.

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Exit

ESG implications for investment exits are rapidly emerging. We increasingly see valuation premiums for business models and competencies that reflect ESG best practices. For instance, our research has shown that increasing an oil and gas company’s share of total revenue from renewable energy from zero to 40% could lead to a doubling of the typical energy company’s trailing EBITDA valuation multiple. We work with our companies to integrate, measure, and communicate their bespoke approach to ESG, as we see these characteristics increasingly valued in investment exits.

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