Blackstone to cut energy costs by 10%

The private equity heavyweight says its new solar power initiatives have the potential to cut energy costs and improve environmental performance throughout its portfolio.

Blackstone’s portfolio companies may be able to benefit from a 10 percent cut in their energy costs after the buyout giant teamed up with a solar development company to implement an energy saving programme.

Smart Energy Capital, a third-party development company, will support project development and maintenance of Blackstone’s solar programme – part of an ongoing effort to focus on sustainability across the firm, according to a Blackstone statement.

The programme will include solar panels and systems being installed on the rooftops of portfolio companies. The installation of these systems is free and they will be owned, operated and maintained by third-party investors in a bid to lower operational and financial barriers. 

The portfolio companies will then buy their solar power via a long-term power purchase agreement, which Blackstone estimates will lower their power costs when the systems go-live.

“The scale that Blackstone brings to their program allows an opportunity to collapse both cost structure and project timeline,” Smart Energy Capital’s managing partner, Rob Krugel, said in a statement.

The programme is another initiative that complements our ongoing success in reducing energy costs and driving environmental performance improvement across our portfolio, Don Anderson, Blackstone’s chief sustainability officer, said in the statement.

Blackstone is not alone in the private equity world in advocating firms step up their ESG efforts. Kohlberg Kravis Roberts (KKR) made moves to make their offices more environmentally sustainable earlier this year. 

KKR aimed to launch a series of initiatives that “include reducing waste, updating procurement practices, and improving operational efficiencies around the use of resources, such as paper, bottled water, and kitchen supplies” in their offices, according to the firm's 2011 ESG report.

The firms will hope this extra effort does not go unnoticed with their investors who have shown  a desire to challenge GPs on their ESG efforts.

Volkert Doeksen, the chief executive of Dutch fund of funds AlpInvest Partners, which was recently acquired by Carlyle, spoke of the importance of environmental, social and governance (ESG) programmes at Private Equity International’s Responsible Investment Forum last month. 

Doeksen said better companies and an improved public image are two reasons why fund managers ought to be establishing environmental, social and governance (ESG) programmes as part of their overall investment strategy.