How should private equity firms deliver net-zero targets? One private equity firm is recruiting its LPs to hold it accountable. Adamantem Capital, an Australian mid-market buyout firm, has assembled a committee of its investors to monitor portfolio companies’ net-zero targets and delivery plans.
The firm requires each company in its A$795 million ($536 million; €515 million), 2021-vintage second fund to create plans to reach net-zero Scope 1 and 2 emissions within 10 years of acquisition.
The “emissions reduction committee” is “populated by our LP base”, said Natasha Morris, a managing director for responsibility and impact, speaking at PEI Group’s Responsible Investment Forum: Europe this week. “We meet twice a year with [the committee] to discuss the emission reduction plans… to get them to approve the plans of all portfolio companies and to track and monitor progress against them.”
“It has been a really collaborative and transparent way of showing that journey to our LP base,” Morris said. “I’ve seen first-hand some of the technology challenges that – particularly for our portfolio companies in the hard-to-abate sectors – are focused on.”
Adamantem is raising its first climate fund, which has a A$350 million target and counts Aware Super and the CEFC among its LPs. The firm is aiming to announce a first close towards the end of this year.