Sustainability & Climate Change Team of the Year

Contact Phil Case

PwC Email: philip.v.case@uk.pwc.com Website: www.pwc.co.uk

UK

Over the last 18 months, headline grabbing extreme weather events, and commodity price shocks have become more common. With unpredictability looks set to increase, preparation is everything. Phil Case, director, PwC, examines how sustainability and climate change strategies have risen up the corporate agenda and are driving opportunities of their own.

PwC help clients identify, understand and manage the risks posed by a perfect storm of climate change, water scarcity, increasing pressures on natural

resources and

sustainable development. Businesses need to get engaged on the areas materially relevant to their business. Private Equity (PE) is a good example. Our research shows that the rewards can be significant when it is approached in the right way.

PE houses use ESG to add value

Working for the UN backed Principles for Responsible Investment, we examined the effect that a company’s performance in environmental, social or governance (ESG) factors is having on mergers and acquisitions activity with major buyers. We found that good performance can improve deal values; poor performance can be a deal breaker.

PwC’s own work with PE houses bears this out. We examine where the value can be protected or enhanced and then monetised. From pre-acquisition

sustainability

assessments, through portfolio company ESG reviews during the “hold” period, to sustainability advice at exit, the interest in the ESG agenda is shifting from “tell me” to “show me”, and will soon reach the “prove it” stage. Major buyers told us that good performance in relation to EGS factors can actually be a motivator to do a deal.

One third of companies said that they believe positive performance in this area can enhance the reputation and brand of a company, including increasing the speed of the acquisition process. On the flipside, three quarters of trade buyers said that in some cases poor performance in relation to ESG factors had prevented a deal from happening or had affected their willingness to do a deal. Issues that matter are not always the most obvious ones either – one trade buyer reported a deal falling through as the company they were thinking of buying had operations that threatened the local habitat which was home to tigers.

More broadly than PE, the question for investors and shareholders is how resilient is a business to disruption? Resilience is the watch word in the board room, whether planning for risks or the long term opportunities.

Philip Case is a specialist in sustainability & climate change in the financial services sector. philip.v.case@uk.pwc.com

About PwC

PwC’s award winning global sustainability and climate change team works with public and private sector clients, NGOs, private entrepreneurs, policy makers and think tanks to make business and economic sense of sustainability and climate change. Our clients, like us, are serious about sustainability and climate change and its potential.

We provide the most comprehensive range of services focused on green growth. Our global sustainability and climate change team of around 700, is led by the firm in the UK(100). Specialists work across the complete range of sustainability impacts and business opportunities including environmental science, economics, carbon reporting and trading, CSR strategy, private equity/ M&A, resource planning and supply chain,

reporting and measurement,

biodiversity, financing, environmental tax and regulation, renewables and clean tech.

The ‘Sustainability and Climate Change Team of the Year’ award from Finance Monthly readers is recognition of PwC’s ongoing commitment to and expertise in sustainability in the Financial Services sector. To find out more www.pwc.co.uk/sustainability

see

PwC’s award winning global sustainability and climate change team

works with public and private sector clients, NGOs, private entrepreneurs, policy makers and think tanks to make business and economic sense of sustainability and climate change.

Finance Monthly GLOBAL AwArds 2013 37