Private Equity Interest in EDF Climate Corps at All-Time High

Summer at EDF is always an exciting time as EDF Climate Corps fellows fan out and begin their placements at organizations across the country. This year we're thrilled to see a dozen fellows working with private equity firms and their portfolio companies, the highest number of such placements in a single summer. In total, EDF has now placed 44 EDF Climate Corps fellows in the private equity sector to date.

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CC 2012 fellow Sarah Stern presents her work to CD&R's Daniel Jacobs, left, and Thomas Franco, right

Managing investment dollars equivalent to roughly 8 percent of U.S. GDP, the private equity sector is critical to sharing, replicating and advancing corporate environmental best practices, so it's gratifying to see the level of activity continue to build. New hosts this year include portfolio companies Associated Materials, Avaya, Floor & Décor, Philadelphia Energy Solutions and Taylor Morrison. Private equity firms KKR and Warburg Pincus are also hosting fellows this year, as they have previously.

Since EDF and KKR first partnered in 2008 to launch the Green Portfolio program, KKR’s portfolio companies have achieved more than $900 million in financial impacts while avoiding 1.8 million metric tons of greenhouse gas emissions, 4.7 million tons of waste and 19.5 million cubic meters of water use. Out of this work, EDF developed and made available to companies a free tool for identifying and managing environment, social and governance (ESG) issues.

As to Warburg Pincus, for the second year in a row they are sponsoring an EDF Fellow to work with several portfolio companies during the summer on energy efficiency and sustainability projects.

Watch this space later this summer for updates on this year's EDF Climate Corps fellows as they find ways to save money and reduce emissions by cutting energy waste, making the case that what is good for our planet is good for business. Their success is the best evidence of the strategic shift among investors, who increasingly recognize ESG management as a powerful tool for improving investment practices and creating value for both companies and the environment.

Also of interest: Private Equity Firms Realize the Value of Participating in EDF Climate Corps

 

Be humble, be bold: inspiration from the 2014 Shared Value Summit

“Be humble; be bold,” said David Browning of TechnoServe, offering his advice on developing partnerships at the 2014 Shared Value Leadership Summit. By that, he explained, your goals should be aspirational, but that you should “ground-truth” your strategies before getting too far ahead of yourself.

Michael Reading

As a manager in new project development with EDF’s corporate partnerships team, I was drawn to the Summit to learn from other organizations working to harness the power of markets to drive societal and environmental progress, creating “shared value” for all involved. Browning’s talk was just one of the highlights of the Summit, where an inspiring combination of expertise, experimentation and uncommon alliances was on display.

Redefining shared value

Shared value is a still-evolving idea, first defined in 2011 as “a management strategy focused on companies creating measurable business value by identifying and addressing social problems that intersect with their business.” While the terminology is new, the concept of creating it through corporate-NGO partnerships thankfully isn’t.

What is new, as noted in the opening plenary, is the rapid shift of companies from launching many small-scale pilot projects to “developing the playbook”–codifying and scaling best practices across business units and entire sectors.

Honing the playbook

The term playbook itself captures the diversity of efforts that companies at the Summit described as necessary to drive real results. “You have to take a variety of approaches to do something big,” said Beth Keck of Walmart in summing up the company’s wide-ranging efforts with international NGO TechnoServe to incorporate one million smallholder farmers into its supply chains. JPMorgan Chase & Co and the Nature Conservancy announced the launch of NatureVest, an innovative new platform drawn from both organizations’ strengths to drive impact investment in conservation.

Partnerships that require both expertise and experimentation to scale up impacts are never easy and speakers offered their hard-won insights. According to Zia Khan of Rockefeller Foundation, partners need to not only care about the problem to be solved, but see it as important to their organization. Our partnership with AT&T came quickly to mind; water scarcity represents a critical operational issue for the company and an important issue for EDF, which has driven us to work together to help AT&T and other companies in five water-stressed areas reduce their water use.

Applying lessons learned

At EDF, I work with colleagues to develop new models to engage business in addressing critical environmental issues, including efforts to reduce pollution from fertilizer and emissions from deforestation, and EDF’s playbook’s getting richer and more diverse with each new project. At the moment we’re ramping up a competition to identify innovative technologies to make it easier for the oil and gas industry to find and quickly fix methane leaks, as well as working with Walmart to phase out toxic chemicals from their supply chain.

With exciting challenges ahead, I look forward to applying lessons learned from the Summit: to be bold in seeking transformational change; be humble in learning from the expertise around me; and to seek alliances, however uncommon, with those willing to work together.