Ricardo supports the Advancing Transport Climate Strategies project

22 November 2016 Consultancy.uk

Ricardo Energy & Environment has been hired to support rapidly developing countries develop and meet nationally determined contribution targets in light of fast-growing carbon based transportation.

The global commitment to align human consumption with the reality of what can be sustainably borne by the environment, is reflected in the coming into force of the Paris Agreement. As part of the agreement, countries around the world agree to nationally determined contributions (NDCs) – whose aim is to keep warming to ‘well below’ two degrees Celsius.

One of the major contributors to climate affecting emissions is transportation. In total around 14.5% of global emission emanate from internal combustion engine exhaust. The rapid development of the automotive industry, particularly in rapidly developing countries, is one area of concern in meeting NDCs.

Ricardo to run nationally determined contributions transportation study

In a bid to better support rapidly developing countries understand their commitments in light of additional vehicles on the road, Deutsche Gesellschaft für Internationale Zusammenarbeit has appointed Ricardo Energy & Environment to review the emissions reduction commitments made by a number of fast developing countries in Africa, Asia and South America. Ricardo joins the wider ‘Advancing Transport Climate Strategies’ project, funded by German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety, through its International Climate Initiative, to integrate transportation conditions with their wider climate policies and national development goals.

Ricardo’s role includes analysing individual countries’ transport strategies in light of NDCs, interviewing stakeholders and NDC project managers, as well as undertaking in-country research with national policy makers.

Sujith Kollamthodi, Ricardo Energy & Environment Sustainable Transport practice Director, says, “Greenhouse gas (GHG) emissions from transport are expected to increase significantly in developing countries, as increased urbanisation and the demand for personal mobility drives rapid increases in car use and road traffic levels. Our research will help to identify how such countries can take steps to reduce GHG emissions from their expanding transport sectors. The outputs of this work will help GIZ and the German Government in their roles supporting nations to drive sustainable economic and environmental development throughout the world.”

The firm states that it was selected on the basis of its strong performance in transportation, including to local authorities; of supporting countries with their Intended Nationally Determined Contributions; of launching a guide and the DECC tool; and lastly of supporting countries, such as Vietnam, monitor and implement NDCs.


Private equity firms ramp up sustainability focus

19 April 2019 Consultancy.uk

In line with business leaders across the industrial gamut, private equity firms are increasingly on board with sustainability projects. According to a new study, the investment arms for major funds are implementing a number of strategies aimed at supporting sustainable economic development in line with global goals.

While the business world has finally begun to acknowledge the danger of climate change, effective action plans remain difficult to achieve. The Paris Agreement has stipulated a clear target for the decades leading up to 2100, although massively reducing emissions while not crashing the economy could be a tall order.

Businesses that are able to acquire capital can use it to boost productivity and output, thereby creating a virtuous cycle of development. However, some businesses are better able to utilise resources than others, both in terms of their relative productivity, as well as the value of the respective outcomes relative to costs (including environmental harms). Financing can therefore provide an avenue to select businesses that are aligned with various global sustainability goals, while shunning those that drive little or unsustainable social value creation.

Top moves made by investment arms towards responsible investment

Profit has for the longest time been the central criterion for investment decisions. Yet profit at any cost is increasingly seen as creating considerable social harms, while often delivering only marginal value. As a result, the private equity sector, which was initially sluggish to change its ways with regards to sustainability, has started to see the topic as an opportunity as much as a challenge.

A new study from PwC has explored how far sustainability goals have become part of the wider investment strategy for private equity (PE) firms. The report is based on analysis of a survey of 162 firms and includes responses from 145 general partners and 38 limited partners.

Maturing sustainability

Top-line results show that responsible investment has become an issue for 91% of respondents. For 81% of respondents, ESG (environmental, social, and corporate governance) was a board matter at least once a year, while 60% said that they already have implemented measures to address human rights issues. Two-thirds have identified and prioritised Sustainable Development goals that are relevant to their investment segments.

Change in concern and action on climate-related topics over time

While there is increasing concern around key issues, from human rights protections to environmental and biodiversity protection, the study finds there are mismatches between concern and action. For instance, concern among investment vehicles around climate change has increased since 2016.

In terms of risks to the PE firm itself, concern has increased from 46% of respondents in 2016 to 58% in the latest survey. However, the number who have taken action remains far below those concerned, at 9% in 2016 and 20% in 2019. Given the relatively broader scope of investment opportunities, portfolio companies face higher risks – and more concern – from PE professionals, at 83% in the latest survey. However, action is less than half of those concerned, at 31%.

Changing climate

In terms of the climate footprint of the portfolio companies, 77% of respondents state concern in the latest survey. 28% of respondents are taking action through the implementation of measures to mitigate their concerns.

Concern and action taken on ESG issues

In terms of the more pressing issues for emerging responsible investment or ESG issues, governance concern of portfolio companies comes in at number one (92% of respondents), while 60% have taken action on it. Firms have focused on improving awareness – setting up policies and a range of training modules for their professionals around responsible investment decision making. Cybersecurity takes the number two spot, with 89% concerned and 41% implementing strategies to mitigate risks.

Climate risks take the number three spot in terms of concern for portfolio companies (83%), but falls behind in terms of action (31%). Health and safety track records are a key concern at 80% of businesses, with 49% implementing action. Gender imbalance within PE firms themselves ranks at 78%, which is being dealt with by 31%. A recent survey from Oliver Wyman showed that there is gender balance at 13% of GP teams in developed countries.

Biodiversity is also an increasingly pertinent topic, with risks from pollution and chemical use increasingly driving wider systematic risks around environmental outcomes. It featured at number eight on the ranking of most likely global risks for the coming decade, with its impact at number six. As it stands, biodiversity is noted as an issue at 57% of firms, with 15% implementing action.