One year after the World Health Organization declared covid-19 a global pandemic, widespread distribution of the vaccine brings optimism and hope.

Rebuilding our economy from the most significant health and economic crisis in modern history requires large-scale capital investment and a long-term horizon; there are no quick fixes. While government stimulus has successfully bridged the massive output gap caused by the pandemic, private sector capital and expertise is important to reignite job growth and to drive long-term expansion in an economy that is both more equitable and sustainable.

Blackstone and other firms in the private equity industry have an important role to play in this economic recovery and in ensuring future economic growth is generated with more equality and sustainability. A durable recovery demands resources, scale and focus. At Blackstone, this is our approach. Over 35 years, we have built the operating capability and scale that enables us to help transform companies that are shaping our modern economy. The significant investment we have made in our operating and transformation resources allows us to be intentional and impactful as we implement important programmes to help make our companies more sustainable, diverse and accountable.

“Capital investment is just one ingredient in rebuilding our economy”

For example, our real estate business is powering the e-commerce revolution through our 880 million square feet of logistics assets; our life sciences group is funding innovative medicines that can transform patients’ lives; our private equity and growth businesses are fuelling digital innovation by backing pioneers such as Bumble and Ancestry; and through investments in companies like Altus Power and Oatly, we’re supporting the transition to a low-carbon economy.

Our business has the benefit of large scale with investments in more than 200 portfolio companies with nearly half a million employees and over 8,500 real estate assets in 40 countries. We have the ability to drive our sustainability and diversity programmes across a large number of companies affecting hundreds of communities. We seek to be a leader in this regard in our industry and across the broader corporate landscape.

We have built a sustainability programme drawing on insights and best practices from across our portfolio and applying them at scale. This initiative began with implementing simple, fast and low-cost approaches to improving energy performance, like transitioning to LED lighting and installing low-flow shower heads. Over the years, these efforts have led to significant energy savings across portfolio companies and real estate assets. During our 11-year ownership of Hilton through 2018, we helped the company reduce carbon emissions and waste by 30 percent and energy and water consumption by more than 20 percent. Most recently, we announced a goal to reduce carbon emissions by 15 percent across all new investments where we control energy usage.

Next generation

Rebuilding our economy also requires an investment in people – including the next generation of entrepreneurs and innovators. The business community must do more to break down traditional hiring and promotion patterns. We must provide talented emerging leaders from diverse and under-served backgrounds the platform they have earned.

Expanding recruitment, providing job training and improving career mobility should be priorities, not an afterthought. Greater representation of opinions, backgrounds and experiences make businesses stronger and have a positive broader impact: if people are able to build meaningful careers, they can support and reinvest in their communities.

Across Blackstone and our investments, we are making diverse hiring and career mobility part of our standard recruiting and retention process. For example, within Blackstone we have built relationships with a broader number of schools, including more Historically Black Colleges and Universities (“HBCUs”), to help ensure we have a highly diverse group of candidates for our incoming analyst class each year.

We have made significant progress through our recruiting programmes and initiatives: our global analyst class this year is 45 percent women, and our US analyst class is 44 percent racially diverse. Our networking and mentorship programmes are helping these employees build meaningful careers and become future firm leaders. Though we have more work to do, we are proud that 50 percent of our primary businesses are led by a woman or minority as one of its top two leaders and one-third of our broader leadership team is diverse.

Within our portfolio, we implemented a target of at least one-third diverse representation on portfolio company boards for new control investments starting in the US and Europe. We have launched our career pathways programme to help ensure our portfolio companies are fundamentally changing their recruiting and retention practices to access diverse and under-served talent pools. Finally, we announced a $40 million commitment by our Charitable Foundation to expand our student entrepreneurship programme to colleges and universities that have a majority diverse population or are serving under-served communities.

Capital investment is just one ingredient in rebuilding our economy. A lasting recovery – driven by stronger companies and communities – also requires a long-term focus on sustainability, diverse workforces and good governance.

Joe Baratta is global head of private equity and Kathleen McCarthy is global co-head of real estate at Blackstone.