Client:Horizon Capital

Sector: Finance

Services Provided: Carbon emissions reporting (SECR) + Portfolio Reporting

Engagement Period: 2020 to 2024 (ongoing)

Background: 

Horizon Capital is a private equity investor dedicated to technology and service businesses of up to £100m in Enterprise Value. Horizon Capital voluntarily reported its emissions, including those associated with its investments, for several years, underscoring its commitment to transparency and environmental responsibility. 

Carbon Responsible was retained for the fourth reporting cycle to measure GHG emissions and harmonise reporting. With Carbon Responsible’s support, Horizon Capital’s portfolio companies have expanded voluntary Scope 3 reporting to cover the most material and significant emission categories, including business travel, employee commuting, and supply chain impacts.  

Challenges: 

In Carbon Responsible’s work with Horizon Capital, two main challenges arose: engaging with smaller portfolio companies that have limited resources, and aligning financial year reporting required for annual accounts with the calendar year emissions reporting required for portfolio reporting.  

The companies in Horizon Capital’s portfolio vary in size, sector, and industry pressure to report. Some are driven by customer, supplier or stakeholder expectations to improve emissions reporting and reduction, while others operate in industries where this work is less of a focus. Carbon Responsible has supported Horizon Capital’s portfolio companies in progressing toward transparent carbon reporting. 

To align with Streamlined Energy and Carbon Reporting (SECR) requirements, Carbon Responsible provides each affected portfolio company with an emission report aligned with their financial year. Given that calendar year data is required to compile Horizon Capital’s portfolio report, in most cases data collection is needed at least twice a year to meet both requirements. 

Approach:  

2020 and 2021: Initial data collection with focus on Scope 1 and 2 

During the first two years of reporting, calendar year emission data was collected for each portfolio company to be used for Horizon Capital’s portfolio report. As they were impacted by the Covid-19 pandemic and the consequent travel restrictions, these two years were not appropriate to be used as baseline years to set emission reduction targets against. Some Scope 3 data was included in 2020 and 2021, but these years were primarily used to educate Horizon Capital and its portfolio companies on carbon accounting principles, identify the most impactful emission sources, and understand where the necessary data resided within each organisation. 

 2022 and 2023: Scope 3 expansion and financial year reports 

In 2022, some of the companies in the Horizon Capital portfolio were required to report their financial year emissions as part of their annual submission to Companies House. Carbon Responsible therefore started providing full SECR-aligned reports covering financial year emissions, in addition to collecting calendar year data to be used for the portfolio report. At this point, most companies were ready to expand their Scope 3 reporting, e.g., with the inclusion of business travel, hotel, employee commuting and supply chain emissions. 

 2024: Further Scope 3 expansion and target setting support 

In 2024, some of the companies in the Horizon Capital portfolio decided to further expand their Scope 3 reporting, whereas others started setting emission reduction targets and developing a decarbonisation strategy. Most companies have received surveys from clients and customers asking for detailed information on their emission inventories, their targets and their climate strategy. Additionally, the potential cost savings from adopting low-carbon practices provided further motivation for these companies to focus on their climate strategies. 

Value Delivered: 

Horizon Capital and its portfolio of companies were provided with full emission reporting in line with the GHG Protocol Corporate Standard and UK SECR Reporting guidelines. This exercise allowed Horizon Capital to quantify the emission impact of their investments. The nature of each portfolio company meant that the calculated emission profiles varied in profile significantly. Carbon Responsible has worked with each company to direct the continued expansion of Scope 3 disclosure in order to focus on the most relevant and highest impact elements as a priority for continued reporting and disclosure.   

Here’s what Carbon Responsible’s, Emma Baldassari, Carbon Accounting & Data Lead had to say on working with the team at Horizon: 

“Working with Horizon Capital and its diverse portfolio has made us increasingly aware of the rising focus on data accuracy in the finance, security, and technology sectors over the past two years. Many portfolio companies began reporting their Scope 1 and 2 emissions at Horizon Capital’s request and then expanded to include Scope 3 emissions and a reduction strategy, driven by customer demand and as part of a future-proof business approach.”