Advent Partners is a private equity firm that helps founders in the technology, consumer, education, and healthcare sectors to grow and scale their businesses globally. Symon Vegter – Partner and Co-Lead of Responsible Investing at Advent Partners – discusses how financial institutions can leverage technology to measure and manage carbon emissions, at both a firm level and portfolio company level.
In this story
- Climate change shaping the investment landscape
- Responding to increasing demand for ESG reporting
- Leveraging technology to measure emissions
- Powering decarbonisation at a portfolio level through technology
- Request a consultation
Climate change shaping the investment landscape
Founded 35+ years ago, Advent Partners is one of Australia’s longest-standing investment managers. With ~$1 billion in assets under management (AUM) across 8 funds, its investors include some of Australia’s largest superannuation funds, sovereign pension funds, and international endowment funds.
“At Advent, we’ve always focused on being a responsible investor and sustainable in our practices,” says Symon.
“In recent years, we realised that climate change was going to become an important part of our investing program and began to consider climate initiatives that we could drive at a firm level and portfolio company level.”
–Symon Vegter, Partner and Co-Lead of Responsible Investing, Advent Partners
Advent Partners has now committed to achieving net zero emissions at the firm level and across portfolio companies by 2050, in line with the international climate treaty known as the Paris Agreement. Measuring and managing greenhouse gas emissions is core to this commitment.
Advent Partners is now measuring and managing its greenhouse gas emissions at not only a firm level, but across all investments – also known as financed emissions.
Responding to increasing demand for ESG reporting
In addition to Advent Partners’ strong commitment to sustainable practices and being a responsible investor, the firm is also supporting wider ecosystem efforts to meet stakeholder expectations.
Climate change and environment, social, and corporate governance (ESG) are very important to the members and broader communities of Advent Partners investors. As a result, investors are increasingly asking Advent Partners for ESG metrics and KPIs. This assists investors in reporting on plans and driving change at a general partner (GP) level, and Advent Partners in driving change within its portfolio companies.
“We’re seeing an increased focus from our investors around ESG metrics and KPIs – and providing them with reliable information is very important to us.”
–Symon Vegter, Partner and Co-Lead of Responsible Investing, Advent Partners
In the past, private equity firms have faced common challenges when it comes to responding to these increasing ESG reporting requirements, including a lack of standardised metrics across the industry and a myriad of reporting mechanisms.
To assist in navigating this complexity, Advent Partners became one of the first Australian private equity investors to commit to the ESG Data Convergence Initiative in early 2022.
The initiative drives convergence around meaningful ESG metrics for the private equity industry. To date, over 260 global limited partner (LP) and GP members have committed to ESG reporting through the initiative. This represents ~$25 trillion USD in AUM.
Leveraging technology to measure emissions
Symon explains that reporting on greenhouse gas emissions is a key component of metrics within the ESG Data Convergence Initiative.
“Initially, we used Excel spreadsheets and online tools for our ESG program in relation to climate change – that became very difficult and lacked rigour,” says Symon.
The investment firm went on to partner with Pathzero to streamline robust measurement and management of its corporate emissions and financed emissions.
“By leveraging technology, we’ve streamlined the measurement and management of greenhouse gas emissions at both our firm level and portfolio company level.”
–Symon Vegter, Partner and Co-Lead of Responsible Investing, Advent Partners
Pathzero's proprietary technology and sustainability consultants support LPs, GPs, and portfolio companies to:
- scale climate expertise
- facilitate consistent carbon data reporting
- collaborate with business partners on executing ambitious net zero plans.
Importantly, the Pathzero platform is built to align with leading international calculation and reporting standards including the Greenhouse Gas Protocol, and Partnership for Carbon Accounting Financials (PCAF).
“We now use the Pathzero platform to provide carbon data to the ESG Data Convergence Project,” says Symon.
ESG Data Convergence Project reporting will soon be integrated into the Pathzero platform to further streamline this process.
“With Pathzero, we can also easily report back to our LPs on the carbon data and KPIs they’re looking for – supported by the rigour of the Pathzero platform.”
Pathzero has been central to enabling Advent Partners to measure and manage progress towards its Paris-aligned goal of achieving net zero emissions by 2050 at both a firm level and across portfolio companies.
Powering decarbonisation at a portfolio level through technology
The Pathzero platform empowers individuals who may be new to measuring greenhouse gas emissions to gain knowledge and drive real change within their organisation – whether in a financial institution or portfolio company. And they’re supported by trusted greenhouse gas emissions specialists throughout their journey.
“We’ve been fortunate to have a great client service manager and sustainability consultants supporting our management teams to collect, manage, and report back carbon data from across our portfolio companies into the Pathzero platform,” says Symon.
“This end-to-end technology and service offering has really been fantastic – for us and for our portfolio companies,” says Symon.
“Pathzero enables us to provide our portfolio companies with the technology and tools to streamline the measurement and management of their greenhouse gas emissions.”
–Symon Vegter, Partner and Co-Lead of Responsible Investing, Advent Partners
Advent Partners’ portfolio companies have established varying goals, depending on where they are in their climate journey. Many portfolio companies have now verified their emissions boundary and produced an estimate of their emissions.
Some have focused on scope 1 and scope 2 emissions in their estimate, while others have completed scope 3 emissions inventories.
For portfolio companies that wish to go further, the next step is to validate estimates with supporting evidence, and later consider and execute on emission reduction strategies and achieving carbon neutrality.
“Through our investing and sphere of influence on portfolio companies, the private equity industry is uniquely positioned to really drive change,” says Symon.
Request a consultation
Are you interested in measuring and managing the greenhouse gas emissions of your organisation or investment portfolio? We’d love to hear from you. Reach out today for a free consultation to discuss your climate goals and how we can best support you.
