A “New Normal” and Driving Force From Private Equity. 

The global private equity community is buzzing over news that several private equity powerhouses have come together in a bold move to reduce carbon emissions and increase sustainability in a game-changing manner.  The firms aim to advocate for green investments and carbon-free portfolios in order to slow the effects of climate change.  Together, these firms will create the Initiative Climat International (iCI).  This is a global agreement that will ensure all stakeholders follow the rules and meet the goals of reducing carbon emissions through healthy investments.  

The ground-breaking agreement consists of 47 different firms that will all practice and engage in climate risk averse strategies.  Some of the iCI’s members include Intermediate Capital Group, Triton and Hg, Coller Capital, and Permira. 

In a move a notable prominent support, the United Nations has officially endorsed the agreement.  The Task Force on Climate-related Financial Disclosures will provide the framework and guidelines for the firms.

According to CEO of PRI Fiona Reynolds, “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.”  Th iCI was originally created in 2015 by a group of French private equity firms which aimed to follow the Paris Agreement guidelines.  The network is accepting new members. The PRI online Collaboration Platform hosts the iCI.  

The world of alternative investments and private equity is increasingly becoming involved in sustainable investment practices and impact investing.  Many private equity firms will continue to take part in this trend and invest in sustainable companies to an extent we have yet to witness. A “New Normal” in this regard is set to take shape in the global private equity space in the months and years ahead.