Sustainable Investment-focused Group IIGCC Releases Guidelines for Private Equity Investors to Achieve Net Zero Targets

Published on: 3 February 2022 07:17 PM
by KnowESG

A Brief Summary

At a time when most parts of the investment community give due regard to sustainability and net-zero goals, recently, the Institutional Investors Group on Climate Change extends its net-zero investment structure with guidance for private equity firms to help and encourage them and also to model other parts of the investment community, on how to develop net-zero emission private equity portfolios.

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The proposed guidelines are now available for public consultation till 27 February 2022, with the final framework is expected to be realised during the second quarter of this year.

The framework comprises a set of targets, guidelines, measures and other approaches, which help each private equity firm in the field measure its progress over time and how to drive actions that deliver decarbonisation in the real economy.

The Institutional Investors Group on Climate Change (IIGCC) has released a new component for the Paris Aligned Investment Initiative's (PAII) Net Zero Investment Framework (NZIF), which guides aligning private equity portfolios with net-zero that is relevant to both GPs who run private equity firms and limited partners (LPs) who invest in them.

Stephanie Pfeifer, CEO, IIGCC, said: “This is an important step in bringing private markets – an ever-expanding and influential part of financial markets – in line with public markets. When it comes to net zero, private equity is currently a blind spot for institutional investors. We look forward to now seeing how many GPs adopt and can use the private equity components as a blueprint to make and implement net zero commitments.”

Pfeifer added: “Ultimately, the more asset classes that can be incorporated into net zero analysis and strategy, the better chance asset owners and managers have of delivering real-world impact. We will therefore look to add more asset classes to the Net Zero Investment Framework this year.”