The window for action on climate change is dwindling. That's apparent in the 2021 IPCC report. It will be apparent in the communication at COP26. And most of all, it's apparent in the heatwaves, the fires, the floods, and the hurricanes.
As I considered my next career step this summer, I felt compelled to be a part of the solution on climate change. I spent the past seven years working broadly in the field of ESG, jumping between issues like business ethics, supply chain management, labor conditions, and diversity, equity and inclusion. I know there is still tremendous progress to be made across the spectrum of ESG issues, both within corporations and the investment community, but for me, the timing was urgent to contribute my time and energy to fighting climate change.
I have long believed that the private markets are an essential player in solving any global problem. As capital flows from asset owners to asset managers to operating companies, there is an opportunity to embed social and environmental considerations at each step. With the right pressure in the right places, I believe the private markets can be a positive influence. With respect to climate change, I envision a world where:
- asset owners make ambitious net-zero goals and make meaningful efforts to demonstrate progress toward those goals
- asset owners evaluate asset managers on the carbon intensity of their investment strategy as well as their efforts to decarbonize their portfolios
- asset managers begin evaluating each incremental investment based on how it will affect their fund's carbon intensity, and
- asset managers begin working with businesses in their portfolios to further decarbonize
The tools and tactics will vary - from a pension fund to an insurer, large buyout investor to a mid-market direct lender, and heavy manufacturer to an asset-light software business - but I believe a broad decarbonization push in the private markets will be an important factor in mitigating climate change.
Today, the biggest hurdle to this vision is the data. After all, at its heart carbon management is a data problem. It is not easy or cost-effective for an asset manager to determine a portfolio-wide carbon footprint. This means that it is not feasible for that same asset manager to report a carbon intensity figure to their investors, nor is it feasible for those investors to make decisions on the allocation of capital according to carbon intensity.
Persefoni fills this gap. As the ERP of carbon, the Persefoni platform enables investors and their portfolio companies to more easily calculate and manage their carbon footprint. By leveraging the GHG Protocol and the Partnership for Carbon Accounting Financials (PCAF), Persefoni makes this possible for control (private equity) and non-control (private credit, venture capital, public equities, multi-asset) investors.
I can't wait to dive in and work with my network of private markets investors on this new challenge of decarbonization. And I'm beyond excited to do this with a fast-growing team that is mission-aligned and focused on building a supportive and stimulating workplace. If you're interested in the product or joining the organization (we're hiring!), reach out!
