Blackstone Doubles Down on ESG with New Hire

Blackstone is setting a new tone in its commitment to ESG. The firm has hired Eric Duchon as global head of real estate ESG, a newly created position. In this new role, Duchon will work with Blackstone’s global real estate asset management teams to build and scale existing environmental, social and governance efforts. He will also work with portfolio companies on sustainability, diversity and inclusion issues.

Blackstone has long been an advocate of ESG, having spent several years building its ESG model. That commitment has led to a plan to reduce carbon emissions by 15% across all new investments where Blackstone controls energy usage and a target of one-third diversity on portfolio company boards for new control investments in the US and Europe starting in 2021. As part of the program Blackstone has also established a hiring program that will identify, recruit and retain candidates from underserved communities for middle-skilled roles across our portfolio.

These commitments promise to have a massive impact. Blackstone’s private equity and real estate businesses are made up of more than 250 portfolio companies and it has a global real estate portfolio valued at $329 billion. Not only is ESG impactful in a company of this size, it also has the potential to drive better results through evidence-based insight, according to an ESG report that the firm produced in September 2020.

Blackstone began building its ESG model with hospitality assets 10 years ago with a goal of implementing quick and low-cost measures to improve energy performance. These efforts included rebuilding toilets and faucets, installing low-flow showerheads, transitioning to LED lighting and improving A/C systems.

This approach has evolved into a more sophisticated and comprehensive platform. For instance BlackRock announced at the annual Morningstar Investment Conference that by the end of this year, 100% of its portfolios will integrate ESG metrics, up from 70% at the end of April. Duchon will continue to build on this platform, bringing decades of experience, including as the global head of sustainability at LaSalle Investment Management. In the role, he was responsible for the JLL’s ESG strategy and policy implementation for the private equity, securities, and indirect businesses globally.

Blackstone isn’t alone in its embrace of ESG. CenterPoint Properties, as another example, recently closed a $250 million green bond. The issuance illustrates the company’s commitment to ESG, which CenterPoint says is one of its core business practices.