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Private Debt

Below is NZIF 2.0 implementation guidance for private debt. For approaches to achieving the asset level targets and more detailed guidance, please click on the NZIF 2.0 guide below.

Alignment targets
  • Asset alignment target: A % of invested capital or financed emissions to be “managed in alignment with net zero” by 2030 and an increased % by 2040; achieve 100% net zero by 2050.
  • Engagement threshold target: Complete the specified engagement actions for all (100%) applicable private debt investments.
Scope
  • GP direct corporate lending
  • GP venture and/or growth debt
  • GP private structured credit
  • GP fund/NAV financing
  • GP continuation funds across these strategies
  • GP fund of funds
  • LP investments across private credit (direct & indirect)
  • LP co-investment
  • LP-led secondaries
Criteria underpinning alignment assessment
Key
  • Green ticks represent when a criterion is required to be fulfilled for a particular alignment category to be obtained.
Criteria
Committed to aligning
Aligning to a net zero pathway
Aligned to a net zero pathway
Achieving net zero

*Ambition: Long-term goal for the company to be net zero emissions by 2050 or sooner.

Company with emissions intensity required by the sector and regional pathway for 2050 and who’s ongoing investment plan or business model will maintain this performance.

Governance (HIGH IMPACT SECTORS ONLY): Board oversight for climate risk and execution of climate strategy. Climate risk
management and strategy are discussed by the Board at least once a year.

Disclosure: Annual disclosure to investors of scope 1, 2, and material scope 3 absolute GHG
emissions. Public disclosure is best practice.

Targets: 5– to 10-year Paris-aligned GHG emissions reduction target (Scope 1, 2, and
material Scope 3).

Emissions performance: Cumulative YoY reduction meets or exceeds the linear annual reduction established as the target for Scope 1, 2, and material Scope 3 emissions.

Climate strategy (HIGH IMPACT SECTORS ONLY): A proportionate plan is established that sets out the measures to deliver the target. The strategy should be quantified and include capex and opex required
to achieve targets.

Company with emissions intensity required by the sector and regional pathway for 2050 and who’s ongoing investment plan or business model will maintain this performance.

*For the Committed to Aligning milestone, the board should acknowledge the importance for the company to take action toward a net zero future and encourage the company to begin exploring pursuit of Aligning and Aligned criteria.
% of invested/committed capital" managed in alignment with NZ by...
Asset classes
Band
2030
2040
2050
2060
DIRECT
  • GP direct corporate lending
  • GP venture and/or growth debt
1a
40% Invested capital
75% Invested capital
100% Invested capital
40% Invested capital
1b
20% Invested capital
50% Invested capital
100% Invested capital
40% Invested capital
1c
10% Invested capital
40% Invested capital
100% Invested capital
40% Invested capital
DIRECT
  • GP private structured credit
  • GP fund/NAV financing
1d
10% Invested capital
40% Invested capital
100% Invested capital
40% Invested capital
INDIRECT
  • GP continuation funds across these strategies
  • GP fund of funds
  • LP investments across private credit (direct & indirect)
  • LP co-investment
  • LP-led secondaries
2a
28% Committed capital
75% Committed capital
100% Invested capital
40% Invested capital
2b
18% Committed capital
65% Committed capital
100% Invested capital
40% Invested capital
2c
10% Committed capital
55% Committed capital
100% Invested capital
40% Invested capital
"Committed capital is forward looking metric
Figure 15: Illustrative glide path for Private Debt Portfolio Coverage Targets

Download PDF reports

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Private Debt PDF
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Useful resources

Explore further IIGCC resources which offer additional guidance or information which is complimentary to the use of NZIF.

23.05.24
Resources

Net Zero Investment Framework component for private debt

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