How PE can plan for climate risk with confidence

In this episode, our speakers share why PE is in a unique position to lead our transition to a low-carbon, circular economy.

Related topics Private equity

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:

  1. Champion a long-term, forward-looking perspective
  2. Cross-pollinate climate data across workstreams
  3. Incorporate climate scenarios as core data points
  4. Engage diverse perspectives
  5. Embrace complexity and curiosity
  6. Verify competence on climate and environmental risks in investment teams

For your convenience, full text transcript of this podcast is also available. Read the transcript.

Presenters

Hanne Thornam
EY Norway Head of Climate Change and Sustainability Services

Podcast

Episode 36

Duration 19m 29s

In this series

series overview
(Event List - Manual)

How PE can plan for climate risk with confidence

In this episode, our speakers share why PE is in a unique position to lead our transition to a low-carbon, circular economy.
Podcast

Episode 36

Duration
19m 29s

Presenters

Hanne Thornam

EY Norway Head of Climate Change and Sustainability Services

Which three geopolitical risks PE investors should watch

In this episode, our speakers discuss how geopolitical risk derived from the Covid-19 pandemic, the tech sector and climate change impacts PE.
Podcast

Episode 35

Duration
19m 47s

Presenters

Famke Krumbmüller

EY EMEIA Activation Leader, Geostrategic Business Group

How cybersecurity creates value in PE

In this episode, our speakers explore how PE can manage cybersecurity risk and why it should be viewed as a value creation lever rather than a cost.
Podcast

Episode 33

Duration
30m 14s

Presenters

Paul Harragan

EY-Parthenon Associate Partner, Strategy & Transactions, Ernst & Young LLP

John Nugent

Vice President, Cybersecurity & Tech, Apax Partners

PE Pulse: Five takeaways from 2Q 2021

In this episode, Pete Witte, EY Global Private Equity Lead Analyst, explores the key themes and market dynamics from 2Q 2021 that are top of mind for PE investors.
Podcast

Episode 32

Duration
10m 00s

Presenters

Pete Witte

EY Global Private Equity Lead Analyst

Which six consumer categories PE should watch

In this episode, our speakers explore the consumer product categories, behaviors and trends investors should keep an eye on.
Podcast

Episode 31

Duration
27m 00s

Presenters

Lindsey Kiely

Principal, EY Parthenon, Ernst & Young LLP

Bhakti Nagalla

Senior Director, EY Corporate & Growth Strategy Practice, Consumer Sector

Why PE must aspire to long-term value

In this episode, our speakers explain why PE must aspire to a long-term value (LTV) strategy if they want to thrive in the NextWave of private equity.
Podcast

Episode 21

Duration
15m 00s

Presenters

Andres Saenz

EY Global Vice Chair – Industry Markets

Five post-US election considerations for private equity

In this episode, our speakers explore five topics that should be top -of -mind for PE executives after the US election.
Podcast

Episode 19

Duration
29m 00s

Presenters

Gerald Whelan

Private Equity Tax Technical Leader

Ray Beeman

Co-leader, EY Washington Council

What private equity needs to know about investing in APAC: Part II

In this episode, our speakers help investors understand how new regulations will impact the current and future private equity ecosystem in APAC.
Podcast

Episode 17

Duration
19m 04s

Presenters

John Levack

Vice Chairman, Hong Kong Venture Capital and Private Equity Association