Commemorating Earth Day: Letter from CEO Christian Sinding

Investing in our planet pays off

This year’s Earth Day theme: “Invest in our planet” shows how far we have come since its founding 53 years ago when there were few outlets for raising awareness and action on environmental issues.

This theme aligns closely with EQT’s founding nearly 30 years ago, and with our belief that investing is about “more than capital.” The private capital industry is uniquely positioned to help solve some of society’s greatest challenges, as significant investments are required to close the net zero funding gap. According to recent research by McKinsey, as much as 7.5 percent of global GDP is needed in capital expenditure in environmentally sustainable economic activities, annually, to reach net zero by 2050. Today, by investing in innovation that will play a key role in limiting the effects of climate change and in companies that will play a meaningful part in tomorrow’s economy, EQT can contribute towards fulfilling the Paris Agreement.

We see growing evidence across sectors suggesting that strong sustainability performance increases corporate valuations, all else equal. For instance, research from McKinsey quantifies that a low carbon intensity company is valued at as much as a 17 percent premium. For EQT, this means that by driving our companies and buildings to become more sustainable, we can secure more robust returns for our clients while having a positive impact on the communities we operate in.

Over the last couple of years, we have made several major investments in key climate areas. This includes, for example, our investment in First Student, the largest student transportation service provider in North America, where EQT is investing in the electrification of its fleet of yellow school buses. They are committing to transition 30,000 fossil fuel-powered school buses to operate on electricity by 2035 – creating a business that is more climate-friendly and safe for the families who rely on their service. Similarly, we have invested in the Nordic ferry companies Molslinjen and Torghatten and are decarbonizing integral transportation routes across the region and developing the first hydrogen-based ferry in Northern Norway.

Interestingly, our focus on driving sustainability transformation has also accelerated collaboration across our platform. For example, Spanish solar power developer and producer Solarpack today provides 100GWh of clean energy per year to Saur, another EQT portfolio company providing water services in France.

Transformation isn’t something that happens overnight. It takes intentionality and diligence. In 2021, EQT, as the first firm in our industry, had our science-based emission reduction targets validated and also committed to having our entire portfolio do the same. This marked the start of an exciting journey with our investments. So far, ten portfolio companies have set science-based targets, and another 33 are in the process of mapping out what their journey toward net zero will look like, with many more to come.

At the mark of the annual Earth Day, I am proud of EQT’s successful track record in supporting investments in their pursuit of excellence. Today more than ever, investing in our planet pays off. Doing good for our clients and society at large – is just good business.

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