Given the growing climate change challenge and its increasing effect on investment behavior and decision-making, all companies in the finance sector need to understand and assess their exposure to climate-related risks, the management of these risks, and how they are positioned to capture the opportunities in the markets’ transition to a more sustainable future.
At the same time, members of OPSWF hold an influential leadership role in the private markets sphere, given their collective scale, global reach and experience. Recent studies suggest SWFs as a group owns roughly 16% of global private equity AUM, driven by significant growth over the last decade as SWF asset allocations to private markets increased from 13% of their total in 2007 to 26% in 2020.
Recognizing their influence in the private equity space and the investment risk that results from the lack of climate-related data disclosure from private asset managers, in October 2022, the OPSWF Network, produced the One Planet Climate Disclosure Guidance for Private Markets. This guidance results from wide-ranging interviews, research and a collaborative internal discussion across the Network.
The Disclosure Guidance provides clear and actionable articulation of increasing levels of climate data disclosure from private market participants. Its purpose is to offer guidance on disclosures to help implement TCFD recommendations. It outlines five levels of climate data disclosure maturity for private assets, starting with an ambitious yet achievable first step on carbon footprint estimation that can be implemented immediately across private markets strategies, which gradually progresses to comprehensive, fully measured, reported and verified footprints. At the same time as the publication of the Climate Disclosure Guidance, OPSWF members collectively strongly encourage private markets asset managers to meet the expectations of Level One of the Disclosure Guidance, including estimating carbon footprint, by year-end 2023.
More information on the development of the Climate Disclosure Guidance can be found in the Network's Executive Brief.
