Ceres and ERM believe that the private sector has a critical role to play in mitigating and reversing climate-related impacts on natural and human systems, including the economy. While many businesses and financial system actors have committed to reach net zero by 2050 or sooner, private equity has been slower to act. We believe that action is essential and overdue.
Over the last two decades, private equity has outperformed other asset classes while growing tremendously, adding $US trillions in assets under management. Based on its recent returns and scale, private equity is more attractive and more influential than ever before.
The Changing Climate for Private Equity outlines the direction of the private equity sector with respect to climate. The report is driven by learning derived from in-depth interviews with representatives of 27 top private equity actors and complementary research. It finds the industry facing increasing pressure to align investment activity with carbon reduction targets and other climate-related goals as well as in need of better guidance and tools to support the development and implementation of climate-aligned investment strategies.
Given private equity firms’ sway, The Changing Climate for Private Equity examines how they view climate risk and opportunity and what they expect of companies in their portfolios in terms of net zero goals and climate risk management and disclosure.