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Private equity industry adds weight behind responsible investment



The private equity industry believes responsible investment is “here to stay”, with a recent event in Brussels championing the case for taking long-term non-financial factors into account.

The 2014 Responsible Investment Summit, hosted by the Brussels-based European Private Equity and Venture Capital Association (EVCA) in January, brought together thought leaders, investors and policymakers to discuss the policy issues around responsible investment.

Among the speakers were Wolf Klinz, a German MEP described as the “driving force” behind the European parliament’s position on long-term investment, and Yves Leterme, the former Belgian prime minister who is now number two at the Organisation for Economic Co-operation and Development (OECD).

Michael Collins, public affairs director at the EVCA, felt that delegates were positive about the contribution private equity can play in encouraging a shift towards responsible investment.

While it is not the answer to all of Europe’s investment needs, it is nevertheless a significant potential player and one that should be encouraged”, he added.

Private equity is an asset class consisting of equity securities and debt in companies that are not publicly traded on a stock exchange. Typically, private equity investment is made by a private equity firm, a venture capital firm or an angel investor.

Collins said that the idea of investing for the long-term was “absolutely hard-wired” into the way private equity functions. Because of the lifespan of the average fund, investors commit to lock their money up for around 10 years. Meanwhile, most portfolio company investments are held for around five years.

If you think about what private equity is really doing, it’s building companies that will prosper well beyond the period of private equity ownership. It’s building companies that will thrive when the next owner takes control”, he explained.

The private equity model only works if you’ve built a company that is sustainable and that people would want to invest in. That concept of investing for the long-term and building something for the long-term is right at the heart of what private equity does.”

While the EVCA is keen to note that long-term investment and responsible investment are not necessarily synonymous, it said increased investor interest in environmental, social and governance (ESG) factors meant the concept is on an “upward trend”.

At the Responsible Investment Summit, there were also sessions on tax issues at an EU level, covering things like the Financial Transaction Tax. Delegates heard from speakers such as Heinz Zourek, EU director-general for tax policy, and Sony Kapoor from the thinktank Re-Define.

As for the future of responsible investment, Collins said attendees of the event were keen to emphasise there was no trade-off between investing responsibly and getting decent returns.

He added, “Even more than that, it’s perhaps getting to the stage where investing in companies that have a business model that is sustainable is actually going to be key to their long-term financial health. It’s not just a cost, but actually a driver of performance.

As we get that greater convergence between the right thing to do from an ESG perspective and the financially rewarding thing to do, we’re only going to see responsible investing grow in significance.”

Further reading:

Private equity firms focusing on ESG risks instead of opportunities, says PwC study

PRI study: ESG factors influence countries’ economic development and sovereign debt

Asset owners crucial in promoting ESG practices

Poor ESG records scupper private equity deals

Private equity houses look to ethical investment


A Good Look At How Homes Will Become More Energy Efficient Soon




energy efficient homes

Everyone always talks about ways they can save energy at home, but the tactics are old school. They’re only tweaking the way they do things at the moment. Sealing holes in your home isn’t exactly the next scientific breakthrough we’ve been waiting for.

There is some good news because technology is progressing quickly. Some tactics might not be brand new, but they’re becoming more popular. Here are a few things you should expect to see in homes all around the country within a few years.

1. The Rise Of Smart Windows

When you look at a window right now it’s just a pane of glass. In the future they’ll be controlled by microprocessors and sensors. They’ll change depending on the specific weather conditions directly outside.

If the sun disappears the shade will automatically adjust to let in more light. The exact opposite will happen when it’s sunny. These energy efficient windows will save everyone a huge amount of money.

2. A Better Way To Cool Roofs

If you wanted to cool a roof down today you would coat it with a material full of specialized pigments. This would allow roofs to deflect the sun and they’d absorb less heat in the process too.

Soon we’ll see the same thing being done, but it will be four times more effective. Roofs will never get too hot again. Anyone with a large roof is going to see a sharp decrease in their energy bills.

3. Low-E Windows Taking Over

It’s a mystery why these aren’t already extremely popular, but things are starting to change. Read low-E window replacement reviews and you’ll see everyone loves them because they’re extremely effective.

They’ll keep heat outside in summer or inside in winter. People don’t even have to buy new windows to enjoy the technology. All they’ll need is a low-E film to place over their current ones.

4. Magnets Will Cool Fridges

Refrigerators haven’t changed much in a very long time. They’re still using a vapor compression process that wastes energy while harming the environment. It won’t be long until they’ll be cooled using magnets instead.

The magnetocaloric effect is going to revolutionize cold food storage. The fluid these fridges are going to use will be water-based, which means the environment can rest easy and energy bills will drop.

5. Improving Our Current LEDs

Everyone who spent a lot of money on energy must have been very happy when LEDs became mainstream. Incandescent light bulbs belong in museums today because the new tech cut costs by up to 85 percent.

That doesn’t mean someone isn’t always trying to improve on an already great invention. The amount of lumens LEDs produce per watt isn’t great, but we’ve already found a way to increase it by 25 percent.

Maybe Homes Will Look Different Too

Do you think we’ll come up with new styles of homes that will take off? Surely it’s not out of the question. Everything inside homes seems to be changing for the better with each passing year. It’s going to continue doing so thanks to amazing inventors.

ShutterStock – Stock photo ID: 613912244

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IEMA Urge Government’s Industrial Strategy Skills Overhaul To Adopt A “Long View Approach”



IEMA, in response to the launch of the Government’s Industrial Strategy Green Paper, have welcomed the focus on technical skills and education to boost “competence and capability” of tomorrow’s workforce.

Policy experts at the world’s leading professional association of Environment and Sustainability professionals has today welcomed Prime Minister Teresa May’s confirmation that an overhaul of technical education and skills will form a central part of the Plan for Britain – but warns the strategy must be one for the long term.

Martin Baxter, Chief Policy Advisor at IEMA said this morning that the approach and predicted investment in building a stronger technical skills portfolio to boost the UK’s productivity and economic resilience is positive, and presents an opportunity to drive the UK’s skills profile and commitment to sustainability outside of the EU.

Commenting on the launch of the Government’s Industrial Strategy Green Paper, Baxter said today:

“Government must use the Industrial Strategy as an opportunity to accelerate the UK’s transition to a low-carbon, resource efficient economy – one that is flexible and agile and which gives a progressive outlook for the UK’s future outside the EU.

We welcome the focus on skills and education, as it is vital that tomorrow’s workforce has the competence and capability to innovate and compete globally in high-value manufacturing and leading technology.

There is a real opportunity with the Industrial Strategy, and forthcoming 25 year Environment Plan and Carbon Emissions Reduction Plan, to set long-term economic and environmental outcomes which set the conditions to unlock investment, enhance natural capital and provide employment and export opportunities for UK business.

We will ensure that the Environment and Sustainability profession makes a positive contribution in responding to the Green Paper.”

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