Lande Spottswood was a young M&A lawyer at Vinson & Elkins LLP in Houston when the shale boom reshaped the energy industry. Now a partner at the firm, Spottswood is seeing another transformation, this one to cleaner forms of energy, as she discussed on this week’s Drinks With The Deal podcast.
“The strategics are getting a significant amount of pressure from their investor base to get better, to actively find things to do to lower carbon intensity,” Spottswood said. “On the private equity sponsor side, we’ve seen a real demand from limited partners to invest with sponsors that are going to find ways to do good while making money.” Sponsors have raised large funds with a focus on social sustainability, clean infrastructure and similar goals, and that money will have to be put to work, she said
That has spurred investment in a wide range of technologies, including liquified natural gas, the infrastructure around a mostly electric vehicle fleet as well as batteries for those cars, and the generation of solar, hydrogen and wind energy both domestically and internationally.
Investors are also demanding that publicly traded energy companies become more aggressive about reducing their carbon footprints. “There’s a bar in terms of what investors expect, and it keeps going up,” she said. “They want focus, they want a plan, they want accountability against the plan, they want to see progress.”
Here’s the podcast: