Initiative Climat International issues new guidance on GHG accounting for technology and software companies | News and Coverage

July 17, 2023

Initiative Climate International (iCI), in collaboration with ERM, today releases a new guidance document to help software companies account for indirect or “value chain” greenhouse gas (GHG) emissions, known as Scope 3 emissions. Did. This standard represents a practical application of his GHG protocol designed to support his ESG professionals at private market companies and software companies.

Download the report: Beyond Boundaries: A Step-by-Step Guide to Calculating Greenhouse Gas Emissions in the Software World

This guidance is based on the GHG Protocol’s Corporate Value Chain (Scope 3) standard and aligns with the Science-Based Targets Initiative (SBTi) accounting requirements for target setting. Its aim goes beyond mere carbon accounting by identifying challenges, resources and tips specific to the software sector, helping software companies identify, report and ultimately reduce their Scope 3 GHG emissions. Masu.

This guidance covers the following areas:

  • Establish a governance structure for GHG accounting and reporting.
  • Scope 3 carbon accounting with heatmap and material category recommendations.
  • Setting science-aligned goals and an overview of the work our industry partners are already doing.
  • Disclosure requirements and reporting trends.
  • Examples of carbon reduction efforts and practices from small businesses to multinational software companies.and
  • Discussion points for investors to engage with management teams, and for software companies to engage with suppliers and partners.

iCI communicated the new guidance through its Carbon Footprint Working Group, co-chaired by Hg and Montagu, two private equity firms specializing in software investments.

Andrea Siau, Hg and Kim Wall, Montague (co-chairs):“We are pleased to launch this guidance document to provide software companies with best practice accounting principles for value chain (Scope 3) emissions. Addressing characteristics is key to focusing on what the material risks and opportunities are and driving meaningful action. This helps companies improve both the quality and completeness of their GHG emissions reporting. We hope that we can improve this, encourage reduction efforts, and set goals that are in line with science.”

Alison Drury, Global Industry Leader for ERM Technology commented: “We are delighted to partner with iCI to develop and publish this guidance to help the software sector take action on Scope 3 emissions. This sector’s emissions are receiving increasing attention. Scope 3 emissions inventories are rapidly becoming a necessity for all companies as regulations begin to tighten in countries such as the EU, UK and US. This will enable a more consistent and streamlined approach to emissions, supporting private equity firms as they seek to understand and reduce emissions across their portfolios.”

Peter Dunbar, Head of Private Equity at Principles for Responsible Investment (PRI), commented:: “Most of a software company’s carbon footprint is typically indirect, so it is important that investors and portfolio companies in this space focus on measuring and managing their Scope 3 emissions. protocols and standards to help provide much-needed sector-specific advice to private market investors and their portfolio companies.”

Peter Ellsworth, Senior Director at Ceres, commented: “The technology sector now has better guidance to help manage, account for and report Scope 3 emissions, which can make up a disproportionate share of total GHG emissions, as well as With its process and use of case studies, this framework provides companies across sectors with an easy-to-understand plan to measure and reduce their Scope 3 emissions.”

Note to editor

contact: Sixtine Dubost, Asset Class Initiatives Specialist [email protected]

About Initiative Climate International (iCI)

iCI is a practitioner-led global community of private equity firms and investors seeking to better understand and manage the risks associated with climate change.

iCI members share a commitment to reducing carbon emissions and ensuring sustainable investment performance for private equity-backed companies by recognizing and incorporating the importance of climate risk. In practice, this will effectively reduce climate-related financial risks and greenhouse gas emissions within private equity portfolios, in line with the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD). It means a commitment to analyze and manage. Members are committed to sharing knowledge, experience, and best practices and collaborating to develop resources that help standardize practices across the industry.

iCI has over 250 member companies with a total of USD 4.3 trillion in assets under management (as of July 2023). The initiative is officially endorsed by PRI, which is a supporting partner of The Investor Agenda and enjoys a fruitful partnership with CDP and Ceres, his private equity and venture capital association BVCA and France Invest.

About iCI Carbon Footprint Working Group

The iCI Carbon Footprint Working Group is proud to partner with specialist consultancy ERM to produce this guidance. We would like to thank her extensive network of iCI members for consultation, Hg for her kind sponsorship of the design, and the various parties interviewed during the research for this guide.

iCI working group members:

  • Andrea Siau, Hg (Co-chair)
  • Kim Wall, Montague (co-chair)
  • Brooke Latham, Bliss
  • Marco Bartholdi, CVC
  • Cornelia Gomez and Giacomo Molteni, General Atlantic
  • Ivo Dimov, ICG
  • Fran Heckman and Aga Siemiginovska, Oakley Capital
  • Yuan Long, Permira

About ERM

ERM is the business of sustainability.

As the world’s largest pure-play sustainability consulting firm, ERM partners with the world’s leading organizations to create innovative solutions to sustainability challenges and commercial solutions that meet today’s needs while protecting opportunities for future generations. Exploring opportunities.

ERM’s diverse team is comprised of more than 8,000 world-class professionals in more than 150 offices in 40 countries and territories, helping clients achieve sustainability across their organizations. Through ERM’s deep technical expertise, our clients are well-positioned to address environmental, health, safety, risk and social issues. ERM refers to this feature as a “boot to the board” approach. It is a comprehensive service model that enables ERM to develop strategic and technical solutions that advance goals at the field or executive level.

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