The asset management’s role in the growth of sustainable investing is key to the transition to a low carbon economy. Asset managers have a powerful & influential voice with which to drive responsible investment forward, and to help shape the investment supply chain, and the broader financial services industry.

Climate-related considerations can mitigate risk management and improve investment outcomes bringing opportunities and challenges for asset managers. Institutional Investors will need to consider climate risk on both an enterprise level and on the level of individual portfolios and funds.

Stakeholder demands are driving asset managers’ ESG focus. The asset management industry has a long history of stewardship, but it’s indisputable that the evolution of principles-based regulation is a crucial driver of ESG and climate trends. In order to maintain and attract new investments, a robust ESG strategy is critical to success. Persefoni enables consistency when communicating  to stakeholders allowing for more frequent reporting in real time.

Financial institutions will require more trustworthy data than they have today to better assess ample investment opportunities and promote transparency when reporting to stakeholders. Higher quality and more consistent data will help investors understand what they are investing in and how to best integrate climate into their ESG strategy.

While ESG has traditionally been thought of as difficult to quantify, Persefoni prioritizes transparent, consistent, and accurate company disclosure. Persefoni works to simplify carbon accounting by having codified the Greenhouse Gas Protocol (GHGP) and Partnership for Carbon Accounting Financials (PCAF.) You’ll know where your footprint is derived from and free of data gaps. 

With Persefoni, asset managers can move beyond tactical carbon accounting and begin  incorporating climate-related decisions at the entity level and for product or portfolio-level-disclosure. Our solution allows for analysis across  a core set of metrics from your investment workflows across various instruments including listed and private equity, corporate bonds, project finance, loans and commercial real estate investment. Our process helps you adhere to emerging regulations and account for institutional investor pressure for ESG considerations.

Climate Impact Benchmarking

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Integrating climate related decisions to investment strategy is at its core a data problem, requiring more granular data beyond ESG ratings and a single source of truth. Persefoni’s solution enables investors to complete a broad-based portfolio carbon calculation for Scopes 1-3 using the Partnership for Carbon Accounting Financials (PCAF) methodology across its public and private investments and various asset classes. 

With Persefoni, there is no risk of having data gaps or unexplainable calculations. The proposed approach aims to bring into scope asset management activities conducted by private equity and other private market firms as well as public markets. Persefoni will return the total emissions attributed to a portfolio, where in-scope company emissions, Scope 1, 2 and 3, are apportioned based on a relevant ownership ratio.

In addition, asset managers will need to ensure their own proprietary processes for calculating climate risk are robust, and be able to demonstrate to regulators that the appropriate level of research and due diligence has been carried out to identify specific climate risks affecting the valuation and financial performance of the companies they invest in. With our Footprint Ledger, all activity data is tracked in one place providing a single source of truth to data across your entire portfolio. This is a useful resource when adhering to regulatory requirements, stakeholder requests, or potential audits. 

The use of carbon-related disclosures in the regulatory landscape is evolving rapidly. Since 2021, new regulations based on the Task Force for Climate-Related Disclosures (TCFD) have been emerging throughout the US, UK, Europe, and Hong Kong. They are recommending or requiring  carbon accounting metrics disclosures with a similar robustness to financial disclosures. Persefoni follows the GHGP and PCAF calculation results that can be used for all major sustainability reporting frameworks and is transparent and auditable by assurance providers.

We’re a software company that hires the best of the best when it comes to sustainability expertise, collectively measuring thousands of carbon footprints and helping asset managers and asset owners, set and achieve decarbonization plans. We’ve formed complementary partnerships across the financial services ecosystem to ensure asset managers are well-placed to execute their world-class ESG plans.

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