Environmental Column Intro


I suggested to Dan that the private equity community was ready for a columnist who addresses environmental issues. He agreed. 

So, is this going to be a column about soil and groundwater contamination, asbestos, and permitting?  I hope not. You see, the term environment is so much broader than that, and some of the more current issues can have much larger implications for you investments. 

For example, the European Union expects to pass legislation (Registration, Evaluation and Authorization of Chemicals, or REACH) by the end of the year that requires manufacturers and importers to gather hazard information on the properties of their substances, and to register the information in a central database. New Jersey Senator Frank Lautenberg introduced similar legislation in July 2005 that would force chemical manufacturers to provide health and safety information on chemicals used in consumer products like baby bottles and food wrapping instead of presuming a substance is safe until proven dangerous. The principle, know as the reversal of the burden of proof, is the cornerstone of REACH and Sen. Lautenberg’s legislation.  

In this country, we are starting to pay attention to Greenhouse gases. Arnold the Repubicrat in California has turned green. Cars in California again will need to meet more stringent standards than the rest of the country, and several northeastern states are considering similar measures. This environmental issue clearly has significant ramifications for investors in the automotive sector. 

How about Nanotechnology? The concept is wonderful, and the potential is enormous. In cosmetics and coatings we already are using the technology to enhance the durability and finish of their products.  What about the workers who manufacture the stuff? The toxicity has not been evaluated for materials that are now being manufactured in forms small enough to be absorbed through the skin.  We never had to answer that question before for things like steel, for example, but we will. As we know, we found out what happened to asbestos workers, after the fact.  The next liability is out there, we just do not know for certain what it is. 

My intent is to use this column to explore environmental issues for the investment community. My purpose is not to alarm, but to inform. I have been in the environmental business for more than 30 years. As with anyone with experience, my knowledge goes beyond what I have been able to cram into my brain, it includes information I can extract from my contacts. 

Why me? I have been completing environmental due diligence for financial and strategic buyers and their counsel on deals from local to global scale for more than 20 years, and am inclined to think that I have developed an understanding of how to communicate environmental issues to deal makers in terms of risk. Not only that, I have reached the point in my life when I am willing to give my opinion on nearly anything. 

I plan to explain environmental issues in their broader sense, explore their potential impacts, and make judgments about the significance to the investor. I understand that my columns will be biased. For a column, bias is a good thing: It makes people react, opens a dialogue, and makes the whole process much more interesting. 

Finally, please feel free to ask questions, I will do my best to respond quickly, and with nominal “consultant speak.”   You can reach me at [email protected]