New Private Markets: Developing ‘actionable plans’ for climate risks a priority for Actis, says Magor
James Magor, Director, Sustainability at Actis, was interviewed by New Private Markets about the firm’s sustainability plans for 2025. In the piece James discusses Actis’ sustainability priorities for the coming year and what will count as success, where the firm stands on its decarbonisation journey, and how Actis thinks about the role of sustainability in value creation as well as how the firm is integrating AI into its sustainability work. Click here to read the full article and read on below for a snapshot of James’ commentary.
James Magor, Director, Sustainability at Actis, commented:
[On priorities for H1 2025]
“In 2024 we made strides forwards in terms of our understanding of the risks posed to our portfolio by extreme weather events and changing climate patterns. This is covered in our first TCFD report, published in June 2024. We’re now busy converting this increased understanding of risk into actionable plans that build resilience, manage risk and create value across our energy, infrastructure and real estate portfolio. Many of our companies are developing annual operating plans for 2025 and their first priority from a sustainability perspective is to implement tangible and value accretive actions to enhance operational performance and long-term resilience. As part of this we will focus on leveraging technology to further automate our data collection and data analytics workstreams.”
[On value creation]
“We have great examples where our sustainability efforts have created value for our investors, although some are more quantifiable than others. Ways in which sustainability programmes’ value creation efforts can be most obviously quantified include looking at access to sustainable finance as well as resource efficiency initiatives, typically reducing the cost of finance and operating expenditure respectively. Our digital infrastructure investment in Octotel, a fibre network operator in South Africa, is a good example of this. We worked with RMB [bank] to structure an innovative 2 billion rand ($110 million; €110 million) social loan, to expand the network into underserved areas and provide free access to schools and hospitals. This lowered the cost of growth capital for the company. Our current long life infrastructure investment in the UAE, Emicool, is another example, where water and energy charges represent over 60 percent of operating costs. Energy efficiency programmes and converting the water supply to recycled water has reduced the business’ opex. There are similar examples from other platforms and it’s always rewarding to be able to financially quantify such efforts. This being said, there are other areas that are more difficult to quantify but no less significant. For example, we’ve heard first-hand from buyers of our businesses that sustainability performance led to a higher valuation. In general, we’ve seen during exit processes that there is more competition for businesses that are recognised in their industry and region as a sustainability leader, and this competition drives up the valuation.”
Past performance is not a guarantee, projection or prediction and is not necessarily indicative of future results and actual performance may differ materially from any estimated, projected or forecasted performance. We therefore wish to caution you against placing undue reliance on any forward-looking statements, forecasts, projections, valuations or results contained herein. The case studies herein are presented for informational purposes only and were selected to demonstrate the type of investment that Actis seeks to make. There can be no guarantee that transactions with similar characteristics will be available to Actis in the future. Any forward-looking statements, forecasts, estimates, projections, valuations or results herein are based upon current assumptions, may be simplified and may depend upon events outside of the control of the Actis group and Actis does not undertake any obligation to update them. Changes to any assumptions may have a material impact on forward-looking statements, forecasts, estimates, projections, valuations or results.