The Carbon Footprinting of Private Equity and Debt Funds tool allows institutional asset owners and managers to better understand the impact of climate change on private asset portfolios, according to MSCI.
“The investors who power private assets — such as pension and sovereign wealth funds, endowments, and family offices — are increasingly expressing the need to know the carbon intensity of their portfolios and whether investments in unlisted assets are furthering their long-term strategies,” said Remy Briand, global head of ESG and climate at MSCI.
“This new tool will help clients make better-informed investment decisions in support of their transition to net-zero,” he said.
With the analytic instrument, carbon footprint estimates are now available for over 85% of the assets within buyout funds and over 65% of the assets within venture capital funds by valuation.
It assesses corporate carbon emissions by combining private company data from Burgiss with modelling developed by MSCI ESG Research.
Based on estimates for over 15,000 companies in more than 4,000 active private equity and debt funds, the tool can measure and monitor greenhouse gas emissions, and the carbon footprint of private equity portfolios.
Investors can also use it to compare greenhouse gas emissions by fund, asset class, strategy, or portfolio, to identify low-carbon investment opportunities.
It can also align private asset portfolios with global temperature targets, and measure progress towards net-zero commitments and report on decarbonisation of private equity and debt portfolios, according to MSCI.
The Carbon Footprinting of Private Equity and Debt Funds instrument is the latest function offered by MSCI to help investors navigate net-zero, following the launch of the Climate Lab, Net-Zero Tracker, and Implied Temperature Rise.