Enhancing Emissions Reporting

A challenge for asset owners, such as university endowments, is a lack of accurate, consistent, and comparable emissions measurement and reporting. This makes it more complex to track and improve the emissions profile of its fund management partners.

One of UCIM’s private equity partners, a leader in sustainable investment, is addressing this issue by working with peers to align the measurement and reporting of greenhouse gas emissions of portfolio companies. It has developed a detailed but practical framework to map, prioritise and measure Scope 1, 2 and 3 emissions across categories. The framework is used to identify the highest impact opportunities to improve data quality and reporting.

The framework forms the basis of a white paper, to which UCIM contributed, supporting the sector to move toward consistent and comparable emissions reporting.

This is the type of collaborative approach UCIM values - acknowledging that data quality is a manageable challenge, not a barrier to decarbonisation, along with a willingness to come up with innovative ideas that can make a tangible improvement.

It is also an example of a shared belief that climate action is a fundamental responsibility, and a source of long-term value creation. By proactively supporting portfolio companies identifying and implementing climate-related improvements, investors can drive both environmental impact and financial performance.

In addition, the private equity partner is also actively investing in businesses positioned to lead the transition. For example, one portfolio company is a group of semi-independent technical installation and maintenance companies in the Netherlands, Belgium and Germany, is focused on electro & mechanical (“E&M”) installation technology, offering a wide range of services which cover most of the value chain. This company is meeting customer demand for energy efficiency by installing hybrid heat pumps and solar panels in rental homes, resulting in at least 50% energy saving per home.

‍

‍

This fund manager has been collecting greenhouse gas emissions data from its portfolio companies since 2021, using the ESG Data Convergence Initiative (EDCI). It publicly discloses the data in its Responsible Investment Report and TCFD-aligned statements. Disclosures include breakdowns of Scope 1, Scope 2, and Scope 3 emissions at both the portfolio company and firm level. In 2023, it became the first private equity firm to establish a science-based portfolio coverage target based on absolute emissions.

‍