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US private equity firms play catch-up on carbon footprints – survey

Many do not feel they should take greater responsibility for their carbon footprints, but US GPs are nonetheless taking action, according to a survey of 358 private equity executives.

Investor pressure, rather than feeling responsible for protecting the environment, appears to be the motivating force driving the US market to curb carbon emissions, according to an industry survey from Apex Group.

The financial services company published findings from a survey of 358 private equity executives from around the world about what is driving their firms to address climate change and the actions they have taken. Apex Group, based in London, released the results while announcing the launch of a framework called Carbon Footprint Assessment & Reporting to help private funds and their portfolio companies “measure the source of emissions”.

Nine out of 10 investors agreed that climate change is an “urgent issue for the world,” but those in the US were the least likely to say they should assume “greater responsibility for their carbon footprint”. At the other end of the scale, 90 percent of German investors said the onus is on them to curb their emissions.

US investors were also among the least likely to say they are currently measuring their firm’s carbon footprint (only 38 percent said they are). Only France-based firms had a lower score on this front, at 23 percent. Fewer than half of US investors said they were tracking the carbon footprint of their investments, ahead only of Singapore at 32 percent.

Although US investors were the least likely to measure and take responsibility for their carbon emissions, they were the most unified in agreeing that a carbon reduction plan would benefit stakeholders. They were also the most likely to say they had plans to become carbon-neutral.

On regulation, a quarter of investors from the UK and Ireland – the highest amount in the survey – thought their governments could do more to address climate change. German investors were the most in agreement about whether their government was doing enough, at 96 percent, reflecting their strong sense to solve the problem on their own. US investors were the second highest, with 90 percent saying the government was doing enough to address climate change, even though they were the least likely to say they also hold responsibility for acting on their own.