20 min listen
How PE can plan for climate risk with confidence
How PE can plan for climate risk with confidence
ratings:
Length:
19 minutes
Released:
Oct 14, 2021
Format:
Podcast episode
Description
Hanne Thornam, EY Norway Head of Climate Change and Sustainability Services, joins Winna Brown to share why PE is in a unique position to lead our transition to a low-carbon, circular economy. Contact Hanne: hanne.thornam@no.ey.com As private equity (PE) firms focus on ESG, they must also pivot to a long-term, forward-thinking mindset. For an industry accustomed to using historical data to project the next four to five years, this is no simple task; however, it is an existential one. Climate change will mean our world looks very different in a decade regardless of the action we take (or don’t take), and PE firms are uniquely equipped to lead this mission, should they choose to accept it. ESG topics have both financial and commercial relevance, and PE must define and track KPIs that are specific to each portfolio company. It is no longer optional to engage in the ESG conversation, as a lack of awareness is an inherent business risk. Two overarching climate scenarios are possible, both of which require comprehensive adaptation and imagination: A warming scenario in which rising temperatures impact access to raw materials, stoke political stability and disrupt value chains A transition scenario characterized by increasing regulation, bans and changes in technology and consumer preferences Six ways PE firms can shift their mindset to increase their climate competence and confidence: Champion a long-term, forward-looking perspective Cross-pollinate climate data across workstreams Incorporate climate scenarios as core data points Engage diverse perspectives Embrace complexity and curiosity Verify competence on climate and environmental risks in investment teams
Released:
Oct 14, 2021
Format:
Podcast episode
Titles in the series (71)
How private equity-owned businesses can prepare for an exit: Charles Honnywill, EY UK&I Divestiture Advisory Services Leader, discusses specific actions PE fund managers can take to prepare for a successful, well-timed exit. It can be difficult for PE fund managers to have a comprehensive outside-in... by NextWave Private Equity