The BVCA is a supporter of iCI and actively encourages the private equity and venture capital industry to continue deepening its engagement on Net Zero and broader climate issues, including through engagement with initiatives such as iCI.
This page includes more information about iCI and helpful guides for the industry covering Task Force on Climate-related Financial Disclosures (TCFD), accounting for and reporting on Greenhouse Gas emissions and setting science-based targets.
About iCI
The Initiative Climat International (iCI) is a global, practitioner-led community of private markets investors that seek to better understand and manage the risks associated with climate change.
The iCI counts globally over 250 members; representing USD 4.1 trillion as of the end of August 2023.
iCI’s members share a commitment to reduce carbon emissions of private equity-backed companies and secure sustainable investment performance by recognising and incorporating the materiality of climate risk. In practice, this implies a commitment to effectively analyse and manage climate-related financial risk and GHG emissions in their portfolios, in line with the recommendations of the Financial Stability Board’s TCFD. Members commit to sharing knowledge, experience, and best practice, working together to develop resources that will help standardise practices across the industry.
The iCI is supported by the Principles for Responsible Investment (PRI), is a Supporting Partner of The Investor Agenda, and is open to all private markets firms and investors to join. For more information on signing up, please click here.
TCFD Implementation Considerations for Private Equity
TCFD implementation guide for private equity
BVCA and iCI in partnership with KPMG produced this guide, which provides an overview of, and practical guidance in relation to, the TCFD. The guide takes into account the specific context of investors in private markets, to enable firms to understand and embed climate considerations throughout their organisations, and to report accordingly.
The guide is based on the four pillars of TCFD: Governance, Strategy, Risk Management, and Metrics and Targets. We note that whilst the primary focus of this guidance is with respect to private equity firms, we have included additional detail where the guide may be useful and applicable for other asset classes such as private credit and venture capital.
iCI reporting and accounting guide for Greenhouse Gas emissions
iCI and ERM published a guide for accounting and reporting Greenhouse Gas (GHG) emissions within private equity. The document provides guidance on calculating the GHG emissions of PE firms and their portfolio companies, attributing emissions to GPs and LPs, and aggregating emissions at fund level and reporting them to stakeholders.
The aim is to support a more consistent approach to emissions calculations and disclosures, thereby improving GHG emissions reporting, allowing better portfolio analysis and facilitating target-setting to support Net Zero commitments.
The Private Markets Decarbonisation Roadmap
In November 2023, the Initiative Climat International (iCI) and the Sustainable Markets Initiative’s Private Equity Task Force, supported by Bain & Company, launched the Private Markets Decarbonisation Roadmap (PMDR). The PMDR was created by over 250 GPs, LPs, sustainability organisations and consultants, to translate target-setting frameworks on decarbonisation and net zero into a workable and simple approach to classification and disclosure. This is aligned with existing frameworks, whilst providing guidance for earlier stages of their decarbonisation process. The framework has specific guidance for different asset classes, including Private Equity, Buyout, Growth and Venture Capital.
The iCI Software Scope 3 Working Group
The report Beyond Boundaries: A step-by-step guide for greenhouse gas emissions accounting in the software sector was launched in July by iCI in collaboration with ERM to help software companies account for their Scope 3 GHG emissions. The standard represents a practical application of the GHG Protocol designed to support ESG professionals at private markets firms and software companies. It is based on the GHG Protocol Corporate Value Chain (Scope 3) Standard and aligned to the SBTi accounting requirements for setting targets. The intent is to go beyond just carbon accounting by identifying challenges, resources, and tips that are specific to the software sector and can help a software company identify, report, and ultimately reduce its Scope 3 GHG emissions.
PE sector guidance on setting science-based targets
At COP26, industry guidance was published explaining how PE firms can set GHG emission reduction targets for their operations and investment activities, aligned with the goals of the Paris Agreement. The PE Sector Science-Based Target Guidance was developed by the Science-Based Targets Initiative (SBTi), iCI and Anthesis, with support from a range of firms and the BVCA. Several BVCA member firms have had targets approved or plan to in the coming years. We believe it provides an important resource for firms wishing to set achievable emissions reduction targets for their portfolios.
About SBTi and application to SMEs
For more information on science-based targets, please refer to the SBTi’s FAQs here. These summarise the streamlined route available for small and medium-sized enterprises (SMEs) (defined as a non-subsidiary, independent company which employs fewer than 500 employees). The FAQs for SMEs are here.
Further resources on the PE sector guidance
The SBTi hosted webinars and published blogs to provide firms with an entry-level introduction to the PE Sector Guidance.
Blogs:
Explore BVCA ESG-focused training
We offer both introductory and strategic level courses via classroom and digital learning to support the industry as committed responsible investors. Our courses include 'Future-proofing Investments: Decarbonisation Strategies' and 'Developing an ESG Strategy for Your Portfolio'.