Carlyle Sets Its Portfolio Companies a 2050 Net Zero Target

(Bloomberg) -- Carlyle Group pledged to bring greenhouse gas emissions across its portfolio to net zero by 2050, the first major private equity firm to join its Wall Street peers in making the climate pledge.

Washington-based Carlyle said in a statement Tuesday it is taking several actions to bring the businesses it owns more in line with the Paris Climate Agreement.

About three quarters of Carlyle's majority-owned companies in the private equity, power and energy sectors will be in line with net-zero goals by 2025, it said. That would not cover a specific category of emissions that companies can't control in the same way as those generated by their own operations.

Carlyle said it expects to bring the emissions of all its investments -- including those that companies don't control directly -- to net zero by 2050.

Carlyle also said it will push new majority-owned portfolio companies to set Paris-aligned climate goals. The firm said it will monitor their work and press them to collect more data on how they're getting to the targets.

Wall Street banks such as Goldman Sachs Group Inc. have also set targets to cut greenhouse gas emissions.

Carlyle and other leading private equity firms didn't join a group of companies, organized in the lead-up to last year's COP26 climate conference, that pledged to cut CO2 emissions. Some executives fear making promises when there are no global disclosure standards for companies to measure their carbon footprint. How companies and different industry sectors can get to net zero remains a contentious topic of debate among financial executives.

Still, regulators are paying more attention to how businesses account for climate risks.

In March, then-acting Securities and Exchange Commission Chair Allison Herren Lee asked the private equity industry about what climate disclosures privately-listed companies were making.