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Private equity investors launch Paris-aligned climate disclosure framework

A group of private equity investors have launched an international network committing to engage with corporates in reducing carbon emissions in line with the needs of the Paris Agreement.

The new investor group will focus on improving corporate understanding and action on the materiality of climate risk

The new investor group will focus on improving corporate understanding and action on the materiality of climate risk

The Initiative Climat International (iCI), originally launched in 2015 by a group of French private equity firms, has been extended through a new UK network. The UK iCI will be supported by the Intermediate Capital Group (ICG) and the Principles for Responsible Investment (PRI) and will commit investors to engage with private equity-backed companies to reduce emissions.

The new investor group will focus on improving corporate understanding and action on the materiality of climate risk, in turn leading to better non-financial climate disclosure.

Members have committed to analyse and mitigate climate-related financial risk across their portfolios, in line with the recommendations of the FSB’s Taskforce for Climate-related Financial Disclosure (TCFD).

PRI’s chief executive Fiona Reynolds said: “The PRI welcomes the announcement that a group of leading private equity investors have joined the Initiative Climat International, and in doing so are stepping up to the climate challenge. We are pleased to support this initiative and encourage private equity firms to join this committed group of investors as they seek to better manage climate-related risks.”

The formation of the UK networks comes as the Bank of America joins the Partnership for Carbon Accounting Financials (PCAF) initiative to improve emissions assessments. PCAF is aiming to develop a global accounting standard – for use in the financial sector – to improve portfolio transparency of greenhouse gas emissions attributed to financing activities.

PACF is currently supported by almost 70 global banks and investors representing more than $9trn in assets under management.

 “As a global financial institution, and as an industry, we have a critical role to play in accelerating the transition to a low-carbon, more sustainable economy,” Bank of America’s vice chairman Anne Finucane said.

“By joining PCAF, we are helping to drive a consistent framework for institutions to measure financed emissions as well as providing a useful tool in the management of these emissions, which is a critical component when addressing climate change. We look forward to collaborating with other financial institutions and partners on this important effort.”

Last week, NatWest Group pledged to halve the climate-related impacts of its financing by 2030, after becoming the first major UK bank to join PCAF. Morgan Stanley recently became the first major US-based bank to join the initiative. Morgan Stanley has repeatedly faced criticism from green campaigners around the climate impact of its actions. As such, it is hoped that its decision to join the PCAF and its Steering Committee will mark the start of a U-turn on sustainability approaches.


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Matt Mace

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