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A GHG Data Guide for Private Equity


More than 140 of the largest asset owners in the world have committed to achieving net zero investment portfolios.

The pressure on private equity firms to decarbonize their portfolios is only growing. Consider: 

As the pace of change intensifies, more and more general partners (GPs) are recognizing that the carbon transition presents a significant investment opportunity and that having a climate transition plan is increasingly an expected part of most exit strategies, whether via an IPO or a private sale. But seizing that opportunity with your portfolio companies means taking the first step: creating a data strategy.  

Building Your Data Strategy 

Developing a high-quality emissions baseline for a private equity portfolio is challenging yet essential. Here are the key steps for getting started: 

  1. Prioritize which portfolio companies to engage with 
  2. Choose your method for partnering with portfolio companies on data collection 
  3. Leverage emerging standards for metric selection and GHG calculation 

Prioritizing Your Portfolio Companies 

With limited resources, a smart bet for most GPs is to identify the companies whose emissions data collection is most urgent and useful. There are a range of criteria that GPs can use to prioritize their companies: 

 Data Collection Methods 

PE investors can approach GHG emissions data collection in a few ways: 

Given the wide range of carbon maturity within portfolio companies, most GPs benefit from adopting a nuanced strategy that leverages two or more of these approaches. For instance, one might group portfolio companies based on their carbon maturity and business structure. Some portfolio companies may already be calculating their emissions and have an established relationship with a third-party carbon software platform. Others that are less far along could be asked to share their energy data directly with the GP or a third-party advisor so that they can provide the necessary emissions factors and advise on how best estimate data to close gaps. For portfolio companies whose emissions are primarily in the supply chain, an outside service provider with Scope 3 expertise and an efficient data collection platform may be what’s needed.  

Relevant Standards for Private Equity Carbon Accounting & Target-Setting 

While work is still underway to converge private equity metrics on the broader set of ESG factors, methods for GHG emissions accounting and goal-setting are further along: 

 ADEC Innovations: Your Carbon Accounting Partner  

To truly establish a robust carbon data strategy, private equity firms often turn to specialized climate and ESG service providers like ADEC Innovations.  

 ADEC offers a range of services, including:  

As private equity investors embark on their ESG and impact journeys, building a robust data strategy is essential. Establishing common metrics, gathering accurate data and engaging portfolio companies are critical steps. By integrating ESG and impact into your investment strategy, you’ll not only meet regulatory requirements but also contribute to a more sustainable and prosperous future.  

Get in touch: 

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Mariel Barrera Fermin

Mariel Barrera Fermin has over 18 years- experience working within financial services and the investment management sector focusing on Impact & ESG. She is the Business Development Director for Impact Solutions at Adec Innovations. Providing Impact services for Corporates, asset managers and banks.


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