In the time since our last Sustainability & People Report was published, we have endeavoured to expand our sustainability strategy in a manner that retains our long-standing priorities, while also building systems that allow us to scale in line with ICG’s business growth. In practical terms, this has meant continued focus on the “what” – the sustainability factors on which we focus – as well as the “how” – that is, the tools, frameworks, and approach we use to embed sustainability into our business.
In this report, we have placed special emphasis on decarbonisation as well as nature and biodiversity. It is important to showcase our progress against our public science-based targets for relevant investments, as well as our decarbonisation efforts within other parts of our portfolio. And we are pleased to share the initial work we have undertaken to incorporate nature and biodiversity considerations into our analysis, knowing this is an increasingly important issue for the industry and for the world, and a topic that is entwined with climate change.
We have organised the “investing sustainably” section of this report to outline our efforts in both pre-investment assessment as well as post-investment engagement. I am pleased to share the work we have done to create a bespoke materiality tool, which we have integrated into our sustainability assessment framework to make our approach more advanced, and more focused on the factors that will drive sustainable growth within our investments.
There are two broader themes that have played a significant role in our work in the last year, and which will continue to influence our strategy going forward.
Regulation, data, and industry collaboration
As a global alternative asset manager, ICG conducts business in multiple geographical and regulatory domains. We have seen a meaningful increase in ESG-related regulatory requirements and reporting frameworks that have already taken effect or will come into force over the next few years. As such, we aim to be both responsive to and preparing for an increasingly complex regulatory environment – a reality which will continue for some years to come.
This uptick in regulation will hopefully yield more harmonised global disclosures and decrease potential greenwashing and sustainability-related risk in the industry over time. In the meantime, this environment will continue to challenge the availability of comprehensive and robust data in private markets, as well as drive more alignment between LPs and GPs, and within the industry as a whole, in order to meet these demands. Indeed, our work on industry initiatives such as the development of the Private Markets Decarbonisation Roadmap (PMDR) and the creation of the iCI private credit guide on measuring and reporting GHG emissions are only two examples of outputs designed by a broad group of industry experts and peers in order to strengthen and align sustainability data and disclosures.
Sustainability as a value driver
Despite the need for steady focus on regulatory demands, we do not place an emphasis on sustainability as an obligation or a ‘tick box’ exercise; rather, we think of the integration of sustainability considerations into our investment approach as an opportunity for value preservation and value enhancement. While we have some variation in our engagement capabilities depending on asset class and strategy, we believe that by driving stronger sustainability outcomes in our portfolio, we are embedding efficiency, resilience, and commercial opportunity into our investments.
For example, decarbonisation continues to be a priority in our sustainability strategy not only to limit climate change, but because we know there are cost savings and commercial opportunities for businesses and real assets in doing so. And, our emphasis on DEI in our portfolio and in our own operations is predicated on a firm belief that investment in people drives innovation and sustainable growth.
We are delighted to share with you our update on sustainability and people, and look forward to continued progress in the years ahead.
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