A private markets working group focused on climate change has added 20 new members at the launch of its North American chapter.
The Initiative Climat International (iCI) is establishing a network of North American-based asset managers seeking to exchange ideas about how to account for climate change in their investments. The new branch will connect with iCI groups in France, the UK and Scandinavian markets to standardise environmental goals and reporting frameworks.
North American iCI participants will help GPs organise around private markets ESG issues such as measuring carbon footprints, net-zero commitments, and navigating regulatory policies, according to a statement from iCI. The initiative will work alongside a similar effort created by Ceres, a non-profit group supporting sustainable economies, the statement said.
ESG standardisation has mostly occurred in public markets with tighter regulations. In private markets, investors have been left to develop their own guidelines, which has resulted in a patchwork of reporting frameworks and emissions targets.
“Collaboration is a good thing”, said Peter Dunbar, head of private equity at the Principles for Responsible Investment, which supports iCI. Many investors are beginning to address climate risk in their investment processes and, through iCI, are “learning from more advanced practitioners”, Dunbar told New Private Markets.
“iCI furthers action and enables others to make stronger [environmental] commitments,” he said.
As sustainable investing strategies have gained traction among institutional investors, LPs are increasingly expecting asset managers to adopt varying ESG initiatives including the Task Force on Climate-related Financial Disclosures, Net Zero Asset Managers Initiative, or ESG Data Convergence Project.
And as the number of initiatives grow, iCI is seeing its membership list expand. In November, 129 GPs had signed up, up from 56 the previous year. Now, 162 GPs representing $2 trillion in assets have become members.
The climate-focused GP network began in 2015 as a response from seven French private equity firms to the Paris Agreement goal of limiting global warming to 1.5 degrees Celsius or less. Initially called Initiative Climat 2020, the firms agreed to work together to reduce greenhouse gas emissions by forming working groups exchanging information and best practices.
iCI is now governed by an organising committee, led by Natasha Buckley, vice-president of ESG at HarbourVest Partners. In North America, KKR is chairing the new iCI branch and will help establish initial working groups for GPs.
Elizabeth Seeger, KKR’s managing director for sustainable investing, said the initiative is “about all of us learning from each other”.
“iCI is a recognition that climate change is a global issue, and it’s going to require partnership among all players,” Seeger told New Private Markets. “This initiative offers a structure that brings together existing efforts and resources to help accelerate what we’re doing as a GP community.”
GPs in the North American iCI chapter include:
- Adam Street Partners
- Ares Management
- BC Partners
- Bregal Investments
- Clayton, Dubilier & Rice
- Energy Impact Partners
- Global Infrastructure Partners
- Hamilton Lane
- HarbourVest Partners
- Kohlberg & Company
- One Rock Capital Partners
- Riverstone Holdings LLC
- StepStone Group
- Warburg Pincus