London, 4 March: Private equity investors are the target of a guide on the risks and opportunities posed by climate change, issued this week by the London-based Institutional Investors Group on Climate Change (IIGCC).
“While publicly-listed companies have long been required to disclose information relating to the potential impact of climate change on their business, the private equity community has not been obliged to research or communicate comparable information,” said IIGCC chairman Peter Dunscombe.
“With legislation such as the CRC Energy Efficiency Scheme coming into effect as soon as April, this guide is a signal to the sector that now is the time to step up its attitude to climate change.”
The CRC, formerly known as the Carbon Reduction Commitment, is designed to address carbon emissions from energy use and is set to impact 20,000 large UK organisations.
Aimed at pension fund trustees who are limited partners in private equity funds as well as private equity fund managers, the IIGCC guide sets out a series of questions that both groups should ask of their fund managers or portfolio companies.
“This is guidance, it’s not guidelines,” said IIGCC programme director Stephanie Pfeifer, adding that a next step could be to look at best practice in the sector.
Simon Walker, chief executive of the British Private Equity & Venture Capital Association, said: “As governments across the world step up their efforts to combat growing environmental challenges, it is essential that private equity investors are equipped with the right tools to adequately assess the impact new policy initiatives, and the wider economic effects of climate change, could have on their investments.”
The IIGCC has more than 50 members representing assets worth €4 trillion ($5.4 trillion).
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