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Go beyond climate risk management to value creation

Tailored climate risk solutions for private equity from WTW

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Increase the resilience of your portfolio and optimize the costs associated with climate change. You can enhance your ability to raise and deploy capital and unlock strategic opportunities with WTW’s climate risk analytics including our specialist Private Equity Climate Dashboard.

From due diligence pre-screening to exit, we offer climate risk solutions tailored to the needs of private equity firms.

How we support private equity in creating value from climate risk

We focus less on ESG values and more on creating financial value by helping your private equity business with:

  • Screening/due diligence – Integrate climate risk considerations into due diligence and identify opportunities for value enhancement over a typical holding period and beyond.
  • Valuation – Quantify the physical and transition risks facing your existing portfolio and potential acquisitions by projecting future cash flows for a range of climate transition scenarios. Assess the potential impact of climate risk on equity valuation and creditworthiness.
  • Volatility and risk management – Understand your exposure to increasing volatility. Optimize insurance programs and stress-test your portfolio against disorderly transition scenarios.
  • Active ownership – Help discharge your stewardship duties to enhance value with support on meaningful transition targets and realistic pathways to achieve them.
  • Investment philosophy/strategy to inform decisions driving future growth, as well as compliance with an increasingly complex climate reporting landscape.
  • Fundraising – Support your marketing and fundraising efforts by evidencing a focus on value creation through an analysis-driven climate risk stance.

Featured event

PEI RIF Europe 2024

Ready to explore how your private equity business can create value through climate risk mitigation? Get in touch with WTW colleagues at the Responsible Investment Forum: Europe 20–21 November in London

Tailored climate risk services for private equity, wherever you are in the deal cycle

Climate risk will impact private equity businesses in different ways during various phases of the deal cycle.

If you want to understand the impact of an increasingly complex low carbon transition on your firm and your portfolio companies, access our proprietary climate transition analytics to help assess the likely changes in cash flows. This includes more than two hundred models mapping out sectoral transition pathways across all geographies and analysis of more than 8,000 listed companies.

Should you need a comprehensive view of your climate risk exposures – whether for reporting or more strategic purposes – we can provide a tailored self-service climate dashboard showing your risk in different climate scenarios for various holding periods.

Should you want to take a more strategic approach to climate, our comprehensive climate risk analysis can help you understand unpriced risks to the value of prospective acquisitions and help portfolio companies boost performance by adopting sustainable and climate-resilient business models.

Helping private equity understand the financial impacts of physical and transition climate risks

Our proprietary data and analytics help you outsmart the uncertainty resulting from physical and transition risks that can impact value. WTW climate risk analytics power more than $13 billion in investments.

Our team can answer your most urgent climate questions:

  • What are your present-day and projected future annual losses due to physical risk perils?
  • What level of value at risk (VaR) do your equity investments face when stress-tested under different climate scenarios over different time horizons?
  • What impact would a Paris-aligned transition have on future input costs and consumer demand for your products?
  • How could climate-related geopolitical volatility and structural change, including carbon border adjustment mechanisms, impact your business?
  • Could climate risk put your portfolio at risk of debt covenant breaches or compromise your future access to insurance, equity and debt capital markets?
  • What public and regulatory compliance requirements do you have around climate risk and how can you meet them as efficiently as possible?

Working with WTW we were able to quantify the climate-related exposures of our portfolio and importantly see actionable indications of how to improve the resilience of our assets.”

International investment management company

Ready to explore how your private equity business can create value through climate risk mitigation? Get in touch with our specialists today.

Disclaimer

Willis Towers Watson hopes you found the general information provided in this publication informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, Willis Towers Watson offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).

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