FSN Capital is accelerating climate action and generating above-market returns in the process.
Decarbonization is an urgent global imperative and immediate action is needed.
Key to addressing climate change will be closing the $40 trillion funding gap by 2030. Private equity can play a pivotal role in mobilizing institutional capital towards the Green Transition, capitalizing on the largest investment opportunity of a generation, and generating above-market returns for investors.
The private equity industry is accelerating the Green Transition.
In addition to mobilizing and deploying capital, the industry provides an effective governance approach which facilitates agility, a long-term investment horizon, and expertise in scaling companies and solutions to capitalize on emerging opportunities. Such an arsenal is essential for nurturing the nascent technologies and business models that will usher a more sustainable future into being. Indeed, the industry’s influence can extend to broader market trends, mobilizing institutional capital and setting sustainability benchmarks well beyond the immediate impact that private equity firms generate in their own portfolios.
The FSN Capital Funds are investing in and scaling solutions the world needs and generating above-market returns in the process.
The investments include companies such as Obton, which generates clean energy equivalent to all households in San Diego or Amsterdam, and Polytech, which supplies components for 60% of new wind turbine blades to improve the yield and uptime of windmills. By backing these companies and the solutions they provide, FSN Capital is accelerating the transformation of our conventional economy to the green economy of tomorrow.
FSN Capital is forging new decarbonization pathways to green conventional companies.
To catalyze its industry’s potential to scale the Green Transition, FSN Capital in collaboration with select peers helped develop the industry guidelines for setting Science Based Targets (SBTs) in private equity and was among the first six private equity firms in the world to have its SBTs approved. FSN has committed to having all 30 of its companies commit to the Science Based Targets Initiative by 2030—ten years ahead of industry standard—with an interim goal of 60% by 2026, and its current portfolio includes companies that have already made significant strides towards reducing their carbon footprint.
Increasingly, customers require FSN portfolio companies to commit to net-zero, meaning that in decarbonizing the companies are also enhancing their market competitiveness and stakeholder trust—an indication of the increasingly sympathetic relationship between sustainability and commercial success.
A growing convergence of impact and returns.
Decarbonization is not just an environmental necessity; it is also driving growth in topline and EBITDA and augmenting exit multiples while mitigating risk. Forward-thinking companies recognize the commercial benefits of decarbonization, such as attracting and retaining the best talent, operational cost reductions, revenue growth through brand value enhancement, and risk reduction, all contributing to more favorable multiples at exit.
Innovative products and services that cater to a low-carbon economy are emerging, and companies that are early movers now will reap exceptional rewards later. That is why the ultimate goal of FSN Capital’s ESG work is to create Net-Zero sustainability leaders with good governance and high ethical business standards.
*FSN Capital Partners acting as investment advisor to the FSN Capital Funds
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