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04 Nov 2021 / by Kerr Moir

COP26 Reflections – Valuing Climate Change

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With the UK Climate Change Conference of the Parties (or, rather informally “COP26”) being held in Glasgow, Scotland this month, bringing together the heads of major nations and parties from across the world to discuss and, hopefully, accelerate positive actions toward creating a healthier planet through climate action. The COP26 summit has highlighted a series of key factors in achieving meaningful climate action, including: (i) Global Net Zero Carbon Emissions; (ii) Protect Communities and Habitats; (iii) Joint Efforts in Targets; and (iv) Mobilising Finances. [1]

To achieve the goals detailed, an increased focus has been placed on developed nations to raise ‘at least $100bn in climate finance per year’ [2] through utilisation of public and private sector financing – securing net zero targets means securing finance. This means that to raise finance from beyond those philanthropic companies, the UK, as well as other developed and non-developed nations, have continued their alignment with these promises on emissions neutrality through increased funding, grants, subsidies, and schemes.

These incentives are aiming to target offshore wind, “less established” technologies and “established” technologies within the Renewable Energy (RE) and Sustainability sector [3] – the clear message here seems to be companies should actively invest and diversify in reducing carbon emissions or risk being “left behind”.

With climate change being factored into the decision-making processes of the majority of large and SME’s, the demand for transparency in efforts to reduce emissions has increased, as evident from the ever-more detailed inserts seen in annual reports in more recent times.

It is not only companies that are increasing their transparency and direction of investment, with banks, insurers, investors, and other financial firms committing to ensuring their investments are not only seen to be placed within RE and sustainability investments but are now actively making a difference through their climate financing.

Hilco Valuations Services Europe and Hilco Streambank (Hilco) are perfectly placed to assist companies who are wishing to raise finances for these incentivised climate investments as well as being strategically placed to act independently for those funding the investments, realising values for which to act on. The Hilco team in the UK have decades of valuation and disposition experience across all asset classes, having been involved in numerous business and asset valuation and disposals within the RE and sustainability sectors and are able to leverage Hilco’s global footprint of expertise and resources.

Over recent years our experienced team have worked on valuation and disposal engagements spanning across the renewable sector. In 2018 we expertly navigated the business and assets sale of Green Energy Geothermal on behalf of the Joint Administrators. Green Energy Geothermal was a provider of modular geothermal power plants, with assets in Kenya and Iceland.

Following a significant level of global interest following our sales process, Hilco successfully completed and structured a deal with Canadian energy developer and finance company ECC Global. Additionally we have run competitive sales processes across the breadth of the renewable energy sector, including an innovative tidal wave energy company and a company developing new airborne wind-powered generation system to deliver clean, low-cost electricity at a utility-scale. The acquisition of the intellectual property assets of Kite Power Systems, the innovative wind power company aforementioned, was bought by Norwegian wind energy company Kitemill who plan to set up the first high altitude wind demonstration farm in Norway. We have also provided inventory and accounts receivable appraisals to a leading global manufacturer of onshore and offshore wind turbines.

Our experience within the context of raising finances through ABL procedures, corporate recovery and financial reporting means we can be engaged to carry out a portfolio of exercises to suit the client and, in turn, assist in achieving the active climate goals needed for a healthier planet.

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