The iCI and Sustainable Markets Initiative’s Private Equity Task Force saw the need for private markets to accelerate progress on reducing emissions. They therefore wanted to develop a specific approach for private markets to make meaningful decarbonization progress, specific to their operational environment.

The goal is to provide a common language between all private markets stakeholders, while drawing on and complementing existing net zero alignment and target-setting frameworks. The PMDR also covers a broad range of asset classes, particularly in the case of buyout, infrastructure, private credit and secondaries, while orienting venture capital, growth, and real estate investors on how to kickstart decarbonization. 

The core concepts in the PMDR were developed through consultations with 250+ GPs, LPs, and sustainability organizations. And while there is no expectation of changes to the overall approach, we acknowledge climate standards and regulation is a quickly evolving space, and we expect the PMDR to be a living document that evolves alongside standard practice.

The PMDR is the result of a large-scale collaboration and consultation process, including input from more than 250 general partners (GPs), limited partners (LPs), and sustainability organizations globally.

The PMDR is entirely voluntary – it is designed to provide a common language for funds to describe their decarbonization activities, designed on a principle of flexibility. Funds can use the PMDR approach to define a target but it is entirely optional.

The PMDR is designed on a principle of flexibility, so external disclosures of data are optional. LPs who are familiar with the approach may request the data but sharing metrics is not a requirement for implementing it.

The PMDR is voluntary and optional. It is designed on a principle of flexibility, so can be used for funds of the GP’s choosing. However, the recommendation is to use it across all funds and PortCos to ensure clear and consistent conversations with LPs and other stakeholders.

The objective of the PMDR is to complement existing net zero alignment and target-setting frameworks whilst providing more detailed guidance for GPs at the earlier stage of their decarbonization journey. A co-published guide by PAII and iCI, available through PRI, provides a detailed discussion on how the frameworks align.

The guide aims to help GPs determine which decarbonization methodology may be best suited to their circumstances by highlighting the similarities and differences between the Private Markets Decarbonization Roadmap (PMDR) and the Net Zero Investment Framework’s (NZIF) Component for Private Equity.

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