Your Carbon Playbook

In private markets, effective carbon accounting is becoming business-critical for companies navigating evolving stakeholder, consumer, and operational expectations. Carbon considerations have become essential to environmental, social, and governance (ESG) reporting as interest in the climate-related impacts of business practices rises.

According to a 2023 study of 132 European private equity professionals, 78% said reducing their portfolio’s carbon emissions has positively impacted fundraising performance—underscoring the importance of this information to investment decisions. On the regulatory front, the Sustainable Finance Disclosure Regulation (SFDR) and the Corporate Sustainability Reporting Directive (CSRD), among others, require companies to report on Scope 3 emissions, expanding the scope of mandatory emissions reporting.

With this landscape constantly evolving, general partners (GPs) are tasked with understanding the impact of their portfolio’s operations on the environment, tracking greenhouse gas (GHG) emissions, and working with portfolio companies to develop emissions reduction and decarbonization strategies. This all can seem like a complex undertaking, particularly for companies new to the process.

At Novata, we work with general partners (GPs) and private companies to simplify carbon data management — from calculating emissions to providing audit-ready data and developing disclosure strategies. In this guide, we’ve compiled key resources for investors and companies at different stages of the sustainability journey to make it easy to understand the basics, chart a course forward, and set achievable, yet ambitious science-based targets.