Environmental sustainability is an important priority with private equity and corporate senior executives, according to a recent poll conducted by PwC US. The poll, conducted during PwC’s "Private Equity and Environmental Sustainability" Webcast, found that 88 per cent of the 175 participants believe sustainability will become a more important factor in business decisions and investments in the next two years.
A further 22 per cent responded that they are in the early stages of developing a sustainability strategy for their organisations.
Several factors were cited by participants as the leading drivers for sustainability at their respective organisations, with profit opportunity ranking first, at 33.5 per cent, followed by risk mitigation, which was noted by 22 per cent of those polled. Other factors included image enhancement (19 per cent) and regulation (9.5 per cent).
"Environmental sustainability is a long term value creation lever for private equity firms and corporations and, as demonstrated by our latest poll, decision makers in these organisations see sustainability as a key issue that will play an even larger role moving forward," says Lauren Koopman, PwC Director, US Sustainable Business Solutions.
The 175 private equity and corporate participants in the poll also cited several barriers towards embedding sustainability across their organisations. The majority, or 54 per cent of the participants, said that they either have no mandate or insufficient resources when it comes to embedding sustainability across their organisations.
"It’s a mistake not to look at the opportunities that a strategic sustainability program can bring to private equity and businesses of all shapes and sizes," says Tim Hartnett, PwC’s US Private Equity Leader. "Beyond compliance, environmental sustainability affects the entire business spectrum, offering benefits through a strategic, operational, reputational and financial lens."
Of the senior executives identified in the poll from the private equity community, 72 per cent responded that sustainability is a top of mind priority or important to their firms. This compares to 68 per cent of the executives from corporate organisations who had the same responses.
"Private equity firms are increasingly exploring the value that sustainability initiatives can bring to their current portfolio companies and future investments through cost savings, revenue growth, risk mitigation, and reputational benefits," adds Hartnett. "Leading private equity firms are launching widespread sustainability initiatives to capture cost savings at their portfolio companies such as energy and resource efficiency, fuel savings, waste reduction, and other innovative initiatives – resulting in millions saved."
