Wellcome asks buyout firms to adopt SBTs

The Wellcome Trust, a UK-based medical research foundation and significant investor in private markets, is pressing its buyout managers to adopt science-based targets as it tries to put its whole portfolio on a pathway to net zero.

“We have written to our buyout partners to share examples of best practice we see from across our portfolio and set out our view of gold standard net zero target setting in private equity,” the foundation wrote in its 2022 annual report. “We are encouraging them to adopt a 1.5 degree aligned near-term science-based target, which includes committing to have all portfolio companies covered by an SBT by 2030 or sooner.”

Managers of Wellcome’s £14.8 billion ($18 billion; €16.7 billion) private equity and venture capital portfolio include firms such as Silver Lake, Advent International, Sequioa Capital and Carlyle, according to PEI Group data.

The Science-Based Targets initiative is Wellcome’s “preferred verification initiative”, it wrote.

Elsewhere in Wellcome’s annual report:

• The foundation noted that “the number of climate- and sustainability-related investments in our [venture capital] portfolio is growing,” but that VC managers had so far avoided setting net zero targets “due to a lack of majority control they have over their portfolio companies and the asset-light nature of most venture business models”.
• The foundation reports on its public equity portfolio emissions footprint, but not its private assets, due to the availability (or lack) of accurate data.
• In real estate, the foundation is going to undertake pilot studies “on the practical implications of decarbonising our direct property holdings so that we have sufficient information to then set a net zero target and guide us as to a realistic pace to decarbonise our direct (scope 1 & 2) and indirect (scope 3) emissions”.
• Wellcome has been “actively supporting” the ESG Data Convergence Initiative.

Further reading: The Wellcome Trust’s 2022 annual report