Key Takeaways
- • 28% of surveyed general partners have committed to net-zero targets, with approximately 75% of those commitments on track, demonstrating measurable decarbonization momentum despite broader climate headwinds in financial markets.
- • Nearly all investors now integrate emissions assessment into due diligence processes, with GPs evaluating portfolio company emissions and LPs assessing GP decarbonization practices as standard investment criteria.
- • The Private Markets Decarbonization Roadmap (PMDR) is establishing itself as an industry standard, providing a common language and measurement framework for tracking and communicating decarbonization progress across private markets firms.
- • Decarbonization is increasingly viewed as a long-term value creator and fundraising advantage, with most GPs seeing emissions reduction as a portfolio performance driver rather than a compliance burden, facilitating capital raising despite macro headwinds.
- • The Net-Zero Asset Owner Alliance, managing $9.5 trillion collectively, is phasing private markets into its target-setting framework, signaling institutional commitment to decarbonization integration across alternative asset classes in coming years.
Summary
Private markets are advancing decarbonization efforts with quiet but tangible progress, according to Bain & Company research, even as broader climate momentum has faltered across financial services. While major banks have delayed decarbonization targets and net-zero alliances have scaled back operations, a global survey of general partners and limited partners reveals that private markets participants are executing systematic emissions integration without the headline announcements characteristic of earlier sustainability campaigns. This divergence reflects a maturing approach: practitioners are focusing on measurement and execution rather than public commitments subject to market scrutiny.
The institutional infrastructure supporting private markets decarbonization is solidifying. The Net-Zero Asset Owner Alliance—a UN-convened coalition of institutional investors managing $9.5 trillion in assets—is actively phasing private markets into its target-setting mechanisms for upcoming years, broadening the scope of climate accountability beyond public equities and fixed income. The Private Markets Decarbonization Roadmap (PMDR), supported by Bain & Company and developed in collaboration with market participants, has achieved broad and growing adoption, serving as a common language and measurement system for fund managers to classify, track, and communicate decarbonization progress. Updated guidance, including PMDR 2.0, provides enhanced technical frameworks for firms advancing their decarbonization maturity.
Investor adoption of emissions measurement is nearly universal across the sector. Survey data shows that nearly all investors factor decarbonization into their due diligence and investment decisions. Limited partners increasingly assess general partner decarbonization practices as part of manager evaluation, while GPs routinely evaluate target company emissions during asset assessment. Most firms are measuring Scope 3 emissions, indicating depth of commitment beyond operational emissions. The majority of investors surveyed view decarbonization as a mechanism to support portfolio company performance and long-term value creation, positioning climate action as an operational and financial opportunity rather than regulatory compliance.
Approximately 28% of surveyed GPs have made formal net-zero commitments, with about 75% of those commitments tracking on schedule. While this represents a material cohort of early movers, the data also indicates that decarbonization is becoming embedded across broader populations of private markets investors regardless of formal net-zero declarations. Early adopters of systematic decarbonization measurement and implementation are realizing tangible benefits, and market participants recognize that developing decarbonization capabilities now will provide competitive advantages as regulatory and institutional expectations continue to crystallize. The combination of measurable progress, standardized frameworks, and investor recognition of long-term value creation suggests sustained momentum in private markets decarbonization despite contemporaneous headwinds in other financial sectors.
The institutional infrastructure supporting private markets decarbonization is solidifying. The Net-Zero Asset Owner Alliance—a UN-convened coalition of institutional investors managing $9.5 trillion in assets—is actively phasing private markets into its target-setting mechanisms for upcoming years, broadening the scope of climate accountability beyond public equities and fixed income. The Private Markets Decarbonization Roadmap (PMDR), supported by Bain & Company and developed in collaboration with market participants, has achieved broad and growing adoption, serving as a common language and measurement system for fund managers to classify, track, and communicate decarbonization progress. Updated guidance, including PMDR 2.0, provides enhanced technical frameworks for firms advancing their decarbonization maturity.
Investor adoption of emissions measurement is nearly universal across the sector. Survey data shows that nearly all investors factor decarbonization into their due diligence and investment decisions. Limited partners increasingly assess general partner decarbonization practices as part of manager evaluation, while GPs routinely evaluate target company emissions during asset assessment. Most firms are measuring Scope 3 emissions, indicating depth of commitment beyond operational emissions. The majority of investors surveyed view decarbonization as a mechanism to support portfolio company performance and long-term value creation, positioning climate action as an operational and financial opportunity rather than regulatory compliance.
Approximately 28% of surveyed GPs have made formal net-zero commitments, with about 75% of those commitments tracking on schedule. While this represents a material cohort of early movers, the data also indicates that decarbonization is becoming embedded across broader populations of private markets investors regardless of formal net-zero declarations. Early adopters of systematic decarbonization measurement and implementation are realizing tangible benefits, and market participants recognize that developing decarbonization capabilities now will provide competitive advantages as regulatory and institutional expectations continue to crystallize. The combination of measurable progress, standardized frameworks, and investor recognition of long-term value creation suggests sustained momentum in private markets decarbonization despite contemporaneous headwinds in other financial sectors.
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