FT News Briefing Private equity’s green thumb
10 snips
May 1, 2024 Strong cloud sales from a major tech giant are boosting its revenue and profit beyond expectations. Private equity is stepping up its game to accelerate the green energy transition, despite challenges with uncertain returns. Meanwhile, foreign carmakers are increasingly teaming up with local Chinese tech companies to innovate in the electric vehicle market. These dynamics highlight the need for international firms to rethink their strategies as they navigate the complex landscape of China's automotive technology.
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Private Equity's Green Role
- Private capital, especially private equity (PE), may be key to accelerating the green energy transition due to its ability to handle risk and long-term investments.
- The International Energy Agency estimates $120 trillion is needed by 2050 to meet Paris Agreement goals, exceeding government and public company capacities.
KKR's Green Fund
- KKR is raising a $7 billion climate fund and appointed former Shell boss Ben van Beurden as an advisor.
- Van Beurden previously led Shell's diversification into renewables, signaling private equity's increasing focus on green energy.
Double-Sided Investments
- Private equity firms face criticism for investing in both green energy and fossil fuels.
- While some PE funds invest in renewables, others support coal plants, drawing criticism from environmental groups.