Testimonial from Bérénice Arbona, Head of Infrastructure Private Debt at LBP AM European Private Markets

A pioneer in integrating climate considerations into infrastructure debt strategies, LBP AM European Private Markets (EPM) partnered early on with Carbone 4 to help develop a tool tailored to the specific needs of long-term lenders. Today, the CIARA methodology has become one of the pillars of their climate strategy—both as a means of measuring impact and as a tool for dialogue with investors.

A central challenge: anticipating climate risk in long-term debt

The infrastructure debt division at EPM invests over horizons of up to 30 years. “These are long-term debt financings, on a ‘buy and hold’ basis. We can’t leave anything to chance during due diligence—we need to anticipate trends, especially climate risks,” explains Bérénice Arbona.

From the very early stages of CIARA’s design, EPM joined the initial group of sponsors. At the time, few debt players were involved. “We helped calibrate the tool so that it would be truly operational for lenders, integrating an allocation-based logic.”

CIARA as a tool for consistency and education

EPM then tested the methodology on its historical portfolios. The results provided valuable strategic insights for the future. “We found that our past funds were generally close to 2°C, while the broader asset class averages closer to 3°C. CIARA also helped us grasp the scale of impacts: financing an airport for €10 million could offset the carbon benefits of several hundred million euros invested in renewable energy generation assets.”

This standardized, independently developed calculation allows EPM to move beyond the often inconsistent carbon data reported by issuers. “We needed methodological consistency to report the carbon footprint and temperature alignment of our portfolios to investors.”

A key tool for launching a climate impact Article 9 fund

With CIARA’s support, EPM was able to demonstrate that infrastructure debt can legitimately qualify within the scope of Article 9 climate impact funds. “In addition to the taxonomy alignment we assess internally, CIARA enables us to demonstrate intentionality using impact KPIs such as avoided emissions, implied temperature relative to a 2°C scenario, and total carbon footprint across scopes 1, 2, and 3. The KPIs produced by the tool clearly show a strong coherence between the climate impact of the projects financed and our intentionality to contribute to the Paris Agreement goals. In fact, our strategies contribute to avoiding tens of thousands of tons of carbon per year, with implied temperatures below 2°C.”

What’s next? Autonomy, diversification, and climate vigilance

After several years of experience with CIARA, EPM now aims to internalize part of the calculations through the new platform made available by Carbone 4, in order to gain agility.

For other strategies, such as the Article 8 impact fund focused on “Green & Brown to Green,” CIARA is also used, although “we complement it with other tools to assess the fund’s impact contribution.”

Finally, discussions around CIARA have heightened awareness of stranded asset risks—a major issue for illiquid, very long-term financings. “This has now become an integral part of our risk analysis,” concludes Bérénice Arbona.