In a recent ION Influencers discussion, host Giovanni Amodeo spoke with Kenny Chen, founder of Turbo Net Zero, about integrating sustainability into private market investments. Here are the key insights from their conversation:

1. The Growing Importance of Sustainability in Private Markets

• Private markets represent a significant opportunity for sustainability impact, with ~140,000 private companies (>$100M revenue) compared to just 20,000 public companies of similar size

• Stakeholder pressure is driving adoption: LPs (especially pension funds and SWFs), regulators, and corporate clients increasingly demand sustainable practices

• Regulatory requirements are expanding, particularly around IPO readiness and ongoing disclosures

2. The Business Case for Sustainability

• Multiple Expansion: Sustainable companies trade at higher EBITDA multiples (similar to tech-enabled businesses)

• Capital Access: Better terms for sustainability-linked loans and green financing instruments

• Revenue Growth: Strong sustainability credentials help win contracts with Fortune 500 companies

• Chen emphasized sustainability must be viewed as a value driver, not just compliance

3. Implementation Challenges & Solutions

• Common Pain Points:

  • Getting portfolio company buy-in

  • Avoiding perception as cost center

  • Focusing on material initiatives

• Turbo Net Zero’s BOT Model:

  • Build frameworks tailored to each GP’s strategy

  • Operate programs hands-on with portfolio companies

  • Transfer knowledge for long-term capability

4. Operationalizing Sustainability

• Focus on “high impact initiatives” that drive tangible business value

• Structure programs with quick wins (next quarter), medium-term (12 months), and long-term goals

• Embed sustainability into standard corporate transformation periods post-acquisition

• Critical to align deal teams, operating partners, and portfolio company management

5. Emerging Trends & Myths

• Key Trends:

  • More sophisticated LP expectations

  • Growing regulatory requirements

  • Increased focus on operational value creation

• Common Myths to Debunk:

  • “One-size-fits-all” sustainability approaches

  • Need to pursue every available standard/certification

  • Sustainability as purely a cost center

6. Talent Needs for Sustainability Transformation

• Requires interdisciplinary professionals who can:

  • Understand technical sustainability issues

  • Apply strong business/commercial acumen

  • Balance long-term vision with short-term execution

  • Build trust across GPs and portfolio companies

Final Takeaway:

Sustainability in private markets has evolved from nice-to-have to core value driver. Successful implementation requires:

1. Aligning with business objectives

2. Focusing on material, high-impact initiatives

3. Building operational capabilities throughout the investment lifecycle

For GPs, the opportunity lies in using sustainability to drive multiple expansion, reduce financing costs, and accelerate revenue growth – while meeting growing stakeholder expectations.

Key timestamps:

00:07 Introduction to Sustainability in Private Markets
03:59 Identifying Gaps in Sustainability Practices
06:41 Regulatory Pressures and Market Shifts
08:07 Sustainability as a Business Opportunity
11:26 Emerging Questions in Sustainability Integration
15:42 Managing Complexity in Sustainability Initiatives
19:40 Key Messaging for Value Creation
22:12 Building Partnerships with GPs and Advisors
23:37 Debunking Myths in Sustainability
26:38 Skills and Qualities for Sustainability Professionals