A decarbonisation roadmap for private markets from iCI, SMI and Bain & Co

Private fund managers now have a roadmap on how to decarbonise their portfolios – a project that will likely make GPs’ decarbonisation efforts easier and more comparable, accelerating our transition to net zero.

The Private Markets Decarbonisation Roadmap has been developed by Initiative Climat International, the private equity taskforce of the Sustainable Markets Initiative (PESMIT) and Bain & Co. It provides a common language, classification system and measurement system for fund managers’ decarbonisation plans and progress, including absolute emissions, intensity and alignment with the transition.

It covers every private fund class: buyout, growth equity, venture capital, infrastructure, real estate, private credit and secondaries. “It incorporates different views – US GPs, smaller GPs, GPs in different asset classes – and a large majority who are not yet advanced on decarbonisation,” said Serge Younes, head of sustainability at Investindustrial and iCI’s global net zero lead. “It’s an easy way to communicate what a GP is doing… it’s simple and easy to understand.”

“We piloted the PMDR across funds,” said Ivo Dimov, Intermediate Capital Group associate director for sustainability and ESG. “Ultimately, it helps investors identify where they are on their decarbonisation journey, where there’s further engagement needed and where they could go next – the building elements to tell a genuine decarbonisation story.”

One more takeaway: the roadmap marks one of the widest collaborations between different associations, frameworks and working groups. iCI, PESMIT and Bain & Co also consulted with the Carbon Disclosure Project, Ceres, the Glasgow Financial Alliance for Net Zero, the Institutional Investors Group on Climate Change, the Institutional Limited Partners Association and Principles for Responsible Investment.