“The clock is ticking”. This statement is what we hear more and more often when it comes to the current climate situation. A statement that did not pass us by as an investor and that strengthened our sense of responsibility for climate protection. That is why we have set ourselves the goal of giving climate protection a central role in our business and investment decisions.
Our path to climate protection began last year with the development and implementation of a “Responsible Investment Policy”. As a private equity investor, we feel obliged to create sustainable value for our portfolio companies, our investors and all of our stakeholders. To achieve these goals, we have decided to take ESG factors – environmental, social and governance – into account in our actions as an investor and company. A central point of the ESG factors is the consideration of climate risks and the obligation to minimize one’s own impact on the climate.
“Thought, said, done”. Unfortunately, it wasn’t that easy. When implementing our commitment to climate protection, we were initially faced with many questions: How exactly can we take climate protection into account in our actions? How can we make a contribution? How do we define our climate goals and how do we implement them? In the last few months we have gained some insights that we would like to share here.
1 – Appreciable changes always start with yourself
We gained this first insight through our collaboration with the Leaders for Climate Action (LFCA) organization. LFCA works hard on awareness for climate protection and has thus compensated and reduced around 116,000 tons of CO2 with almost 500 members. Members commit to active support for climate protection by means of a “Green Pledge”. This includes both a “Personal Pledge” and a “Company Pledge”. The thesis behind it: In order to convey values in the company, these must also be exemplified by the people behind it. The first step in corporate commitment to climate protection is therefore personal commitment. So our two managing partners filed the personal pledge. This is the only way for the company to achieve and work for sustainability.
2 – Climate protection is a marathon, not a sprint
Given the large number of unanswered questions about the implementation of our climate protection commitment, it quickly became clear to us that implementation cannot happen overnight. Instead, with the support of LFCA, we developed an action plan for us on the subject of climate protection. This includes all of our climate protection activities in the coming months and years, but also represents a helpful checklist with which we have found further possibilities to act more climate-neutrally. The starting point for us was measuring our carbon footprint. Because how does a company want to reduce its CO2 emissions without knowing them? A structured measurement of the carbon footprint also helps to identify the areas that have the greatest potential for CO2 savings. We used a combination of various online tools, including those from ClimatePartner, myClimate and KlimActiv, for the measurement. We have identified business travel as the area with the currently highest CO2 emissions, but also the highest potential for savings. In addition, topics such as regular control of the heating, lights and other little things are an important point on the way to climate neutrality.
We reached the next step in the plan in July and this was the offsetting our carbon footprint. To offset our emissions, we decided to support a climate protection project at the Virunga National Park in DR Congo. ClimatePartner supported us in the implementation. For us, climate neutrality is not just a step, but a first milestone on our way to climate protection.
But the rest of the way is still long. We have identified a long list of measures that we will gradually implement over the next few months and years. This also includes the regular expansion and adaptation of the measures because there are constantly new opportunities to reduce our emissions. In addition, we are currently working on a concept of how we can take climate protection into account as a factor in our entire investment process. The core areas are due diligence, the term sheet and the investment phase. It is our goal to evaluate and adapt our activities and measures in relation to climate protection twice a year and to report them to our investors once a year.
3 – Together we can achieve more
Just making your own contribution is not enough to become a real Leader for Climate Action. In 2019, 805 million tons of C02 emissions were caused in Germany. With FLEX Capital we contributed almost 17 tons. The influence that we have within our organization by offsetting and reducing CO2 emissions is not great enough for us. Motivated by LFCA, we want to encourage our portfolio companies, partners and community to share our commitment to climate protection. This blog post is the beginning. We would like to share our experience in dealing with climate protection and thereby motivate others to join our commitment. There will therefore be more blog posts over the next few months in which we will talk in more detail about measuring our carbon footprint, our reduction measures and progress.