Climate resilience emerges as private equity value driver
Private equity firms are treating climate adaptation as a value creation tool rather than simply a sustainability issue, according to a paper from climate technology firm Unwritten.
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Improving physical climate resilience across portfolio companies can help protect earnings, expand EBITDA and support stronger exit outcomes as traditional buyout strategies become less effective, according to the findings.
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The researchers have identified six operational areas where firms can improve financial performance while reducing climate-related risks. These include carrying out site-level risk assessments to improve insurance terms, reducing operational downtime through targeted adaptation measures, strengthening ESG reporting to help companies meet customer procurement requirements, improving supply chain resilience through diversified sourcing, using climate data to access more favourable sustainability-linked financing, and demonstrating climate resilience during vendor due diligence to support higher exit valuations.
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