Anthesis helps IIGCC with net zero framework for private equity funds
Anthesis has supported the Institutional Investors Group on Climate Change with the development of a new net zero guidance framework for the private equity sector.
Commenting on the launch, Misa Andriamihaja, the private equity lead for the Institutional Investors Group on Climate Change (IIGCC), said, “We are pleased to bring to market this framework for the private equity industry.”
“With this guidance, we support LPs and GPs’ efforts, targets and actions in order to achieve real decarbonisation at the level of portfolio companies. Bespoke net zero target types and tailored engagement actions sit at the core of this game-changing guidance for all private equity investors to start and progress in their net zero journey.”
The new guidance, titled the Net Zero Investment Framework Component for the Private Equity Industry, will issue a cohesive, global framework for private equity operators to pursue net zero strategies. The guidance aims to standardise target setting, engagement and reporting between LPs, GPs and portfolio companies to catalyse climate-related action across the private equity industry.
The development of the new guidance was led by IIGCC with significant support from Ceres and Anthesis. IIGCC selected professional services firm Anthesis to facilitate a focus group of leading practitioners within the industry, and oversee the writing of the net zero guidance.
Speaking on the firm’s work, Anthesis Director Barrett Lawson said, “Finance has the power to be a critical enabler in accelerating climate action and transitioning to a low carbon economy. As outlined in the recent IPCC Synthesis Report, there is a rapidly closing window of opportunity to secure a liveable and sustainable future for all. The NetZero Investment Framework Component for the Private Equity Industry guidance provides a practical approach for private equity to be an important catalyst for change in the transition.”
Looking ahead, the guidance accounts for the unique characteristics of the private equity asset class, helping the sector understand how it can best utilise its efforts to catalyse climate-related action. This will be particularly important when it comes to achieving the decarbonisation of portfolio companies – steps which a growing number of investors are undertaking.
Walking the ESG talk
The news demonstrates an increasing appetite for sustainability in the investment sphere, as firms look to distance themselves from the reputational risks of portfolio firms being seen as unprepared for the drive to net zero.
Even as many companies plan to backslide on ESG commitments, as a means to downsize spending during a recession, investors are suggesting this could see them exit. The number of investors – including private equity firms – who plan on walking out is set to double in the coming period, if they cannot achieve ESG change by other means first.