A violent tragedy nearly two years ago focused the attention of private equity firms and their investors on environmental, social and corporate governance (ESG) factors.

After the shooting tragedy at Sandy Hook Elementary School in Newtown, Connecticut, in December 2012, Cerberus Capital Management was thrust into the spotlight as the owner of Bushmaster Assault Rifles, maker of the weapon used by the gunman during the shooting. Soon after the media publicized this detail, the New York-based private equity firm received a call from one of its largest limited partners, California State Teachers’ Retirement System (CalSTRS), raising questions about why the firm owned a gun maker and its social responsibility to the public. Shortly thereafter, Cerberus put the gun manufacturer up for sale. (See, "Private Equity: Investing Responsibly?")

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