The SustainAbility Institute by ERM and Ceres have now published The Changing Climate for Private Equity - a new report examining how private equity firms can address the risks related to climate change while also realizing new investment opportunities.
As private equity continues to grow in scale and significance, the report argues that it must be more aware of its own importance in playing a greater role to help transition to a world of net zero carbon emissions.
Based on in-depth interviews with representatives of 27 top private equity actors and complementary research, the report reveals that the industry is facing increasing pressure to align investment activity with carbon reduction targets and other climate-related goals. However, it is also in need of better guidance and tools to support the development and implementation of climate-aligned investment strategies.
Against this backdrop, the industry is at a pivotal moment. Private equity industry leaders have begun to act and have made progress in ESG strategy, climate disclosure, and the transition to net zero by integrating climate change into their investment processes, portfolio management, and governance. However, the urgency of action needed means the industry as a whole must go faster to align itself with the goals of the Paris Agreement.