Climate-Aligned Private Asset Intro

Institutional investors are sharpening their focus on the financial impacts of climate change in private-asset portfolios. Though climate risk affects every asset, the challenge of addressing it intensifies with private portfolios because of the opacity that can characterize such assets.

Pension and sovereign wealth funds, endowments, foundations, family offices and other asset owners are aligning their strategies with global temperature targets and assessing climate-related financial risks for both listed and unlisted assets.

Private equity general partners are examining the financial impacts of climate change too. They’re assessing the resilience of portfolio companies to climate-related and other environmental, social and governance (ESG) risks, addressing such risks in engagement with portfolio-company management teams, and offering investors insight into the impact of climate risk on valuations.

Owners and managers of private assets turn to MSCI for data and analytical tools that can help them better understand the risks and opportunities of a warming climate, track progress and inform decision-making.

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Why Climate-Aligned Private Asset Portfolio?

Measuring the Carbon Footprint of Private Companies

Carbon Footprinting of Private Equity and Debt Funds

Carbon Footprinting of Private Equity and Debt Funds is designed to help investors measure and monitor greenhouse gas emissions (GHG) within private equity portfolios. The tool, which combines performance data produced by Burgiss Data, a market leader in data and analytics for private assets, with climate risk models developed by MSCI ESG Research, delivers insight into how climate risk may affect private company valuations and positions private equity investors and general partners to capture clean-energy opportunities and align portfolios with global temperature targets.

A Tool for Transparency

Private equity investors and general partners can use Carbon Footprinting of Private Equity and Debt Funds to:

  • Measure and monitor the greenhouse gas emissions of private equity portfolios, based on estimates for over 15,000 companies in more than 5,500 active private equity and debt funds.
  • Aggregate and compare emissions by fund, asset class, strategy or portfolio.
  • Align private-asset portfolios with global temperature targets.
  • Identify carbon-intensive investments and low-carbon investment opportunities.
  • Assess how private equity general partners engage portfolio companies on climate and ESG.
  • Meet net-zero commitments and report on decarbonization of private portfolios to limited partners and pursuant to the Task Force on Climate-related Financial Disclosures (TCFD).

Carbon Footprinting of Private Equity and Debt Funds is available as an extension of Burgiss Transparency Data delivered through the Burgiss Private i® Analytics Platform. The tool is also compatible with MSCI Risk Management and other third-party platforms.


How Climate-Aligned Private Asset Portfolio works

Cutting-Edge Climate Insight into Private Equity Portfolios

Analytical tools from MSCI help investors address the financial impacts of climate change at every stage and better understand how the risks and opportunities of a warming climate may affect their portfolios.

 

Carbon Emissions

Determine and benchmark companies’ complete carbon footprint (Scope 1, 2 and 3).

 

 

Transition Risk

Assess risks companies may face in the transition to a net-zero economy.

 

 

Physical Risk

Estimate exposure of companies’ operations to extremes of weather, flooding and other physical risks.

 

 

Implied Temperature Rise

Estimate alignment of companies or portfolios with global temperature targets.

 

 

Climate Scenario Analysis

Stress test the performance of portfolios for varied climate transition and physical risk scenarios.

 

 

One solution for limited and general partners


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Private Asset Investors

  • Calculate and benchmark companies’ greenhouse gas emissions.
  • Assess the exposure of companies and portfolios to climate-related transition and physical risk.
  • Stress test private portfolios for climate risk.
  • Align private portfolios with global temperature targets.
  • Untangle corporate climate pledges.
  • Conduct due diligence.
  • Meet net-zero commitments and report according to the TCFD, financial industry climate alliances and other frameworks.

Private-Equity General Partners

  • Untangle companies’ decarbonization commitments and assess how likely are they to achieve them
  • Assess the resilience of companies to climate-related transition and physical risk
  • Inform climate-related engagement with portfolio-company management
  • Gauge the readiness of portfolio companies for climate-related reporting

How Climate-Aligned Private Asset Portfolio works Duplicate 1

How Market Participants Use Analytical Tools from MSCI to Address Climate Change in Private-Equity Portfolios

 

 Measure carbon footprint of private companies and funds (powered by Burgiss and MSCI ESG Research)Assess companies’ resilience to material climate and ESG risks and opportunitiesMap out climate-aligned investment strategiesConduct due diligence and spur value creationGauge how investors view company-specific ESG and climate-related risks and opportunitiesClimate risk and ESG reporting
Limited Partners   
General Partners  
Companies   
Consultants   
 

Request a demo of Carbon Footprinting of Private Equity and Debt Funds. Or get in touch to discuss plans and pricing.

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