IIGCC creates first net-zero guidance for private equity

The Institutional Investors Group on Climate Change (IIGCC) has proposed a new private equity component for the Net Zero Investment Framework (NZIF) first published by the Paris Aligned Investment Initiative (PAII) in March 2021.

The comprehensive guidance covers metrics, targets and implementation actions relevant to Limited Partners (LP) and General Partners (GP) and offers a coherent industry-wide approach to net-zero, offering a blueprint for GPs to make and implement net-zero commitments and allowing LPs to incorporate private equity in net-zero strategies for multi-asset class portfolios.

The NZIF is used by signatories of the Net Zero Asset Managers initiative and the Paris Aligned Asset Owners, outlining a common set of recommended actions, metrics and methodologies to maximise their contribution to achieving net zero emissions globally by 2050 or sooner. The proposed private equity guidance is now open for public consultation, with the final component expected to be published in Q2 2022.

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 are able to use the private equity components as a blueprint to make and implement net-zero commitments.”

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