Setting a decarbonisation target for your private markets portfolio? Read our guide

While public markets have benefitted from well-established methodologies and strong, standardised climate data availability for a number of years, the same hasn’t been as true for private markets.

Given the huge diversity of assets that sit within private markets, and a traditionally lower burden on carbon reporting, this investment world has been slower to establish a standard approach to establishing decarbonisation strategies, measurement and reporting.

This poses challenges for assets owners and managers seeking to set wider decarbonisation targets across their portfolios, ranging from how to set an emissions baseline, to measuring progress against targets and incorporating private asset objectives into wider commitments.

To shed light on the different approaches and metrics that can be used to bring private markets into a broader decarbonisation approach, we’ve produced a two-part guide for use by investors – covering carbon measurement, reporting, target-setting, and implementation strategies for private asset portfolios.

The guide builds on previous work done in this area and is designed to address challenges  specific to private assets , supporting both the creation of tailored decarbonisation targets and the evolution of wider portfolio objectives.

Click below to read both parts of the guide:

• Client Guide to Decarbonisation in Private Markets: Part 1 – Measurement and Reporting
• Client Guide to Decarbonisation in Private Markets: Part 2 – Target Setting and Implementation

In  part one , we start from the fundamentals: measurement. This begins with understanding your portfolio’s emissions as a baseline for future improvements. Once this has been established, we explore the range of methodologies that can be employed to track alignment within decarbonisation goals, and assess the levers available to private market asset owners and managers to support delivery against ambitions.

In  part two , we move on to setting wider decarbonisation commitments and implementing them. We provide an outline of the main decarbonisation objectives a portfolio can have and provide advice on setting interim targets, before discussing a range of considerations related to implementation, including examining the tools at an investor’s disposal, methods of influence and the importance of asset allocation.

Ultimately, this guide is focused on setting realistic decarbonisation goals, which have as their foundation relevant and accessible metrics to measure and report on progress along the way.