Data on GHG emissions is rapidly becoming a key component of investment decision-making, but in private markets, data is scarce.
Climate-tech company Pathzero has launched a pilot of the Pathzero Navigator product, a new addition to its SaaS platform, that allows private market investors to build a detailed estimate of their financed emissions.
“Private markets are opaque, and investors have traditionally been reliant on ESG ratings and proxy data to understand the carbon profile of portfolios. With the public demand for accurate information and the emergence of standardized methodologies for measuring and reporting such as GHG Protocol, TCFD and PCAF, we recognized the investment managers’ need for greater accuracy and visibility into their portfolios,” says CEO and co-founder, Carl Prins.
“Pathzero Navigator is specifically designed to cater to asset managers regardless of where they are on their climate journey, providing an easy ‘on-ramp’ for taking a risk-based approach to addressing the climate related financial risk in their portfolios.”
The tool reduces the complexity around collecting disparate carbon data from the various companies in a portfolio. The first step is simply inputting key data about each of the companies, from there, the Pathzero platform will produce an initial emissions estimate, without having to engage directly with the companies.
This offers valuable insights into key emissions ‘hotspots’, and provides guidance for where an investment manager might want to direct their decarbonisation efforts.
As GHG emissions analysis goes further, the platform allows companies to share specific data with their investment managers in a secure, permissioned environment. While managers are then able to offer data access upstream to LP’s and other institutional investors and asset owners.
So far private investment firms StepStone Group, Antler and Carthona Capital have tested the tool through the pilot program.
The program is now open to expressions of interest from other private market investment firms who are eager to gain deeper insights into their GHG emissions profile.
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