BVCA welcomes report into private equity’s role in accelerating low-carbon economy

The BVCA said the report by the Institutional Investors Group on Climate Change (IIGCC), entitled A Guide on Climate Change for Private Equity Investors, is not intended to be a set of rules but a way to inform and spur action into this important and emerging sector.

BVCA CEO Simon Walker said the growing problem of climate change is something the private equity sector must help in tackling.

“As governments across the world step up their efforts to combat growing environmental challenges, it is essential that private equity investors are equipped with the right tools to adequately assess the impact new policy initiatives, and the wider economic effects of climate change, could have on their investments,” Walker said.

The IIGCC is a forum for collaboration on climate change for European investors and has the objective of accelerating investment in a low-carbon economy. The group has more than 50 members, representing assets of around €4tr.

The guide was produced with the aim of creating a greater understanding of the risks and opportunities posed both by climate change and related policy developments.

It sets out a series of questions that investors should ask their existing or potential GPs, or what GPs should ask of their portfolio companies and target investments.

These cover four aspects of climate change and private equity investment, including what awareness GPs have of climate change regulatory issues and how they assess their climate change exposure.

Guidance questions have also been included on what GPs and their portfolio companies are doing to change their business models to adapt to climate change and how they are assessing new opportunities.

HgCapital’s head of renewable energy and BVCA’s chairman of sustainable energy, environment and technologies board, Tom Murley, said climate change presents risks and opportunities across all businesses globally, including private equity.

“Institutional investors are increasingly concerned about climate risks across their portfolios, including private equity investment. The IIGCC is at the forefront of increasing institutional investor awareness of the risks and opportunities of climate change,” Murley said.

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