Newly released resources for private equity investors will help evaluate portfolio progress toward net zero

Ceres welcomes two important new resources for private equity investors to help them evaluate and communicate the progress their portfolio companies are making towards net zero.

Last week the Initiative Climate International (iCI) and the Sustainable Markets Initiative’s Private Equity Task Force, supported by Bain & Company, launched the Private Markets Decarbonization Roadmap (PMDR). This tool is for measuring and communicating private company alignment with net zero and was developed in consultation with Ceres, CDP, GFANZ, IIGCC, ILPA, and PRI.  It adds to existing private equity guidance for measuring the alignment of portfolio companies with net zero, whether the General Partners is already implementing a high-ambition decarbonization strategy or at an earlier stage in their climate journey.  

The second resource, Decarbonization Methodologies for Private Equity, a collaboration by Ceres, IIGCC, PRI and iCI and supported by Bain & Company and the Anthesis Group, compares the PMDR with the Net Zero Investment Framework (NZIF) Component for Private Equity published in May 2023.   

“Both the Private Markets Decarbonization Roadmap and the Net Zero Investment Framework enable private equity investors to evaluate and communicate the progress their portfolio companies are making toward net zero,” said Peter Ellsworth, Senior Director Investor Network, Private Equity and Paris Aligned Investing at Ceres. “While they have several differences – including guidelines for target setting and expectations for communicating progress - they are ultimately complementary and were intentionally developed using much of the same terminology and criteria to measure progress.”  

Decarbonization Methodologies for Private Equity provides General Partners with a concise overview of the key differences and use cases for each guidance to help investors evaluate which framework is right for them. 

“Private equity investors, both General Partners and Limited Partners, now have more than one way to communicate with each other about their ambitions to reduce emissions and the progress they're making toward aligning assets, funds, and portfolios to net zero,” added Ellsworth. “For General Partners, whether they are already implementing decarbonization strategies or just beginning that process, the PMDR provides a structured roadmap for measuring and communicating progress along a scale that their Limited Partners and portfolio companies can easily understand.” 

Ceres encourages asset owners having an allocation to private equity to engage their General Partners in using this tool and looks forward to working with both General Partners and Limited Partners as they begin to implement these frameworks, improve transparency, and advance their decarbonization strategies.  

About Ceres

Ceres is a nonprofit organization working with the most influential capital market leaders to solve the world’s greatest sustainability challenges. Through our powerful networks and global collaborations of investors, companies and nonprofits, we drive action and inspire equitable market-based and policy solutions throughout the economy to build a just and sustainable future. For more information, visit ceres.org and follow @CeresNews.