Fund administrator Apex Group has launched a new Carbon Footprint Assessment and Reporting service to help measure emissions and aid plans to reduce carbon footprints.
The announcement coincided with the release of an Apex-commissioned survey that showed 81 percent of private equity leaders agreed that they and their portfolios should take more responsibility for their carbon footprint.
“There are now increasing commercial and regulatory pressures creating new risks to the bottom line,” said Andy Pitts-Tucker, managing director, Apex ESG Ratings and Advisory. “All companies must quantify and understand their carbon footprint to create and articulate an action plan to reduce their carbon emissions. This tool provides our clients with an accurate and accessible way to achieve this.”
The seven-page report, titled “What is Private Equity Doing in the Fight Against Climate Change?”, shows a strong commitment to reducing carbon footprints on the part of private equity managers in Germany, the United States, the UK and Ireland, Singapore, France, Benelux and Australia.
The study was done by Censuswide, an independent consultancy, between August 27 and September 7. Censuswide questioned ESG decisionmakers from 358 firms on their approach to climate change. The overwhelming majority (90 percent) of respondents agreed that climate change is an urgent issue, but less than half (44 percent) of them currently measure their own carbon footprint.
German managers showed the highest conviction rate, with 98 percent agreeing on the urgency of climate change as a global issue. By comparison, only 78 percent of Australian managers think climate change needs to be urgently addressed, according to the report.
Despite the admission of a need for greater responsibility, less than half of all managers surveyed (44 percent) measured their own footprint, or that of their suppliers, at 48 percent. Only half admitted to measuring the carbon footprint of investments, the report said.
The report showed a wide discrepancy among the various regions. The majority of managers in Germany (69 percent) and Benelux countries (52 percent) reported measuring their own carbon emissions, while American (38 percent) and French (23 percent) managers fell significantly behind.
German PE firms (71 percent) were more likely to measure the carbon footprint of suppliers, while the UK and Ireland managers (37 percent) were less likely, the report concluded.
When it came to PE managers who ranked the carbon footprint of their investments, the pecking order changed. Over half of the private equity fund managers in the UK and Ireland surveyed (58 percent) said they were measuring the carbon footprint of investments, while in Singapore only 32 percent of managers responded positively.
On the topic of reputation, three-quarters of global managers agreed that a carbon reduction plan was viewed as “advantageous” by stakeholders like employees and clients.
The survey showed that nearly half of private equity managers (49 percent) currently offset their emissions by a verified offsetting project; another 42 percent of managers said they planned to in the future.
PE managers showed an “encouraging” resolve to measure carbon footprint in the coming months. More than half of the respondents (57 percent) said they intended to measure next year. UK managers (37 percent) and Singapore managers (36 percent) showed the most reticence.