Private markets mega-firms sign up to climate framework

The group, which includes some of the world's largest private equity and infrastructure firms, pledges to share knowledge on climate-related risks and 'improve the resilience' of long-term investment portfolios.

Five private markets giants have created the One Planet Private Equity Funds group to “advance the understanding of climate-related risks and opportunities within our investment portfolios so that we can build better and more sustainable businesses”, the group said in a statement today.

The founding members are Ardian, The Carlyle Group, Global Infrastructure Partners, Macquarie Infrastucture and Real Assets and SoftBank Investment Advisers. These firms will link up with the two other groups in the One Planet initiative, a 15-strong one for sovereign wealth funds and one for asset managers.

In a joint statement, the firms said: “We commit to actively collaborate within the One Planet Sovereign Wealth Fund Framework and engage with the members of the OPSWF and One Planet Asset Managers. We will also engage with other stakeholders, potentially including regulators and our broader industry to further the objectives set out in the Framework.”

The initiative, which was founded by six SWFs in 2017, has published a framework that sets out three principles to “accelerate the integration of climate change analysis into the management of large, long-term and diversified asset pools”. The three principles are: alignment (with the typically long-time horizon of a SWF); ownership (encouraging companies to address climate issues); and integration (of climate change considerations into investment processes).

In an emailed statement, Carlyle chief executive Kewsong Lee described climate change-related risk as “one of the most pressing issues of our time,” adding, “We are delighted to become a founding member of the One Planet Private Equity Funds Initiative and look forward to driving further progress and navigating the challenges ahead through better collaboration, data and insights.”

The announcement coincides with a meeting held between French president Emmanuel Macron and 33 institutional investor CEOs to discuss responsible investment policies, corporate engagement on climate related financial disclosure, and new investments in renewable energy solutions, according to a statement from One Planet group.