Today, decarbonization is a strategic management exercise in its own right for companies held in private equity fund portfolios. It features in very concrete decisions: investment prioritization, acquisition, integration, growth decisions and access to financing. In other words, it plays out precisely where value creation is built - or eroded.
In practice, defining a credible climate ambition is a demanding exercise. Carbon pathways must be conceived and managed in an environment characterized by strong development momentum, where perimeters evolve rapidly and where structural decisions follow one another in quick succession. This reality makes ‘climate performance’ more complex to consolidate, interpret and track over time.
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Companies and their shareholders thus find themselves facing very concrete decisions.
How do you set reduction targets that are compatible with an ambitious development strategy?
How do you integrate the carbon impact of acquisitions without losing clarity?
How do you effectively mobilize an extended and heterogeneous value chain?
And how do you ensure that the indicators produced genuinely reflect the transformations being carried out on the ground?
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These questions converge on a single observation: decarbonization is a matter of governance and strategic decision-making. Progress requires clear choices about the quality and use of carbon data, about the involvement of senior management and finance functions, and about the incorporation of climate issues into dialogue with investors and lenders.
The aim of this document is to provide guidance on these choices. Drawing on the experiences of companies, investors and lenders, enriched by Carbometrix’s expertise gained from assisting several hundred companies, it offers interpretive frameworks and decision-making tools to help structure credible, manageable and sustainable decarbonization pathways over time.
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The document is organized around five key challenges, as they arise concretely within portfolio companies:
Carbon expertise and governance, when the subject relies on limited resources yet must inform structural decisions;
The quality of carbon data, as a foundation for management and strategic decision-making, beyond the mere production of indicators;
The choice of reduction targets, which directly engages the company’s credibility and its capacity for execution;
Managing the pathway in a growth context, in a model where development — both organic and external — is a central driver of value creation;
The integration of decarbonization into financing conditions, now at the heart of dialogue with lenders, with its attendant opportunities and operational requirements.
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