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Private market managers ‘unprepared’ to meet asset owners’ climate-reporting demands

Managers of private market mandates “are generally unprepared” to help asset owners manage climate risks and reporting demands, U.K. consultant Hymans Robertson found in research released Thursday.

That has significant implications for both defined benefit and defined contribution plans facing governance and reporting obligations under the Taskforce on Climate-related Financial Disclosures that start to apply in October, the research paper said.

“The need for data will not diminish and it is incumbent on asset managers to continue to work with underlying investee entities to improve data availability.” Simon Jones, head of responsible investment for Hymans Robertson, said in a release on the research.

In early 2022, Hymans Robertson asked for climate data from managers used by clients. Of the 59 managers and 137 different funds across private debt, private equity, real estate and infrastructure, 45% of manager did not even respond, “raising concerns as to whether managers are prepared to meet expected requests for climate information,” the paper said.

Among managers responding, just 42% provide data on all funds and a further 14% provide data on some of their funds. Managers within real assets like property and infrastructure were generally better prepared than private investors in corporate assets through equity and debt mandates, the research found. Where data was provided by managers, exposure and process-based metrics covering fund governance and strategy were more complete, while emission metrics were less available.

Some managers expected to provide measurements by the end of the year.

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