Carlyle pledges net zero by 2050

The PE firm emphasized working with companies to change their practices rather than divesting from those with unfavorable climate change characteristics.

Carlyle Group is setting a net-zero greenhouse gas emissions goal for its portfolio by 2050, the private equity firm announced Tuesday.

The $293 billion asset manager described itself as being “among the first major global private equity firms to join the call to accelerate the transition to a net-zero economy with the establishment of both short- and long-term climate goals.”

The short-term goals include making 75% of Carlyle’s majority-owned corporate private equity, power and energy portfolio companies compliant with Paris Climate Agreement standards by 2025 for Scope 1 and Scope 2 emissions, the company stated in the announcement.

After 2025, companies that Carlyle takes a majority stake in will set such goals within two years.

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The firm emphasized working with companies to change their practices rather than divesting from those with unfavorable climate change characteristics.

“[W]e hold ourselves accountable to drive real emissions reductions within our portfolio companies. Investors need to be at the vanguard of helping companies decarbonize across all sectors of the economy,” Carlyle CEO Kewsong Lee said in the announcement. “Not only does this strategy have a higher carbon reduction potential, but it is also key to making companies more competitive in a decarbonizing world — leading to better performance and better results for our investors.”

For two years, Carlyle has been “bottom-up carbon footprinting” some of its majority-owned companies for Scope 1 and Scope 2 emissions, it said. For instance, all majority-owned businesses within the company’s newest US Buyout fund now track their carbon footprints, up from 22% two years ago. Within its European Buyout fund, that percentage similarly increased, going from 35% to 100%, according to Carlyle.