Apollo Global Management
At a Glance
Industry
Financial Services and Insurance
Project Types
Data Analysis, Sustainability and Energy Management Strategy
Year
2021
Location
New York, NY
Summary
Max calculated financed emissions for a complex credit fund and provided recommendations for streamlining similar projects in the future.
Goals
Apollo Global Management, Inc. (together with its subsidiaries, “Apollo”) is one of the largest alternative asset managers serving many of the world’s most prominent investors. In response to mounting requests from institutional investors for greenhouse-gas (GHG) emissions data, Apollo sought to evaluate the Partnership for Carbon Accounting Financials (PCAF) financed emissions calculation methodology and apply it to Apollo’s Credit platform. In addition to calculating financed emissions, Max’s mandate included identifying data limitations within internal systems, assessing disclosure rates of issuers compared to global averages, and providing recommendations for future financed emission calculations.
Solutions
Max, working with Apollo’s ESG team, identified the PCAF Global Standard as the relevant methodology, as it is built on GHG protocol and aligns with other carbon reporting projects including the Task Force on Climate-Related Financial Disclosures (“TCFD”). Max then implemented financed emissions calculations for one of Apollo Credit’s flagship products, the Apollo Total Return Fund (“TRF”). TRF consists of hundreds of positions across asset classes, representing a cross-section of Apollo’s larger Credit platform. To perform the calculations, Max first compiled all publicly available GHG data for positions held in the fund. Where data was not available, he worked across a myriad of teams including Apollo Global Corporate Credit, Emerging Markets, Real Estate, and more to lead outreach to issuers that did not voluntarily disclose their GHG emissions data. Finally, when no information was available at the issuer level, Max used industry level averages to estimate issuer emissions.
Potential Impact
While the long-term impact on TRF remains to be seen, simply having issuer-level GHG emissions data available constitutes a significant and necessary step towards a more complete picture of financed emissions, including the ability to assess exposure to high emitting industries through intensity metrics such as Weighted Average Carbon Intensity (“WACI”). The issuer outreach process presented Apollo with the opportunity to engage directly with issuers and to better understand the current landscape of GHG emissions disclosure. Finally, the project highlighted areas where improvements to internal data collection and storage could help streamline the process and help Apollo perform similar calculations on other funds in the future.