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Jonathan Gray, president of Blackstone Group Inc.

Simon Dawson/Bloomberg

Blackstone plans to cut carbon dioxide emissions at its new investments by 15% within the first three years of buying the asset or company, according to the Wall Street Journal. The goal speaks to the move toward sustainable investments and follows actions by others to cut emissions or adopt net-zero emissions targets.

The move will help Blackstone (ticker: BX) with investments around the world, as countries adopt net-zero targets. China, which generates about 30% of global carbon emissions, has made a pledge to achieve net-zero emissions by 2060. The European Union previously committed to carbon neutrality by 2050.

Reaching net zero, also known as carbon or climate neutrality, on a global basis by 2050 is critical to meeting the goal of the Paris Agreement on climate change of limiting the increase in global temperatures to 1.5 degrees Celsius. Companies can do so by reducing their use of fossil fuels, becoming more efficient, and by offsetting emissions through moves such as funding reforestation efforts.

Some companies have said they would adopt carbon-neutral targets. Walmart (ticker: WMT) has pledged net-zero emissions across its global operations by 2040. Morgan Stanley (MS) said financings for companies and other projects will be carbon neutral by 2050.

Blackstone’s initiative begins in 2021 and will apply to new investments in which Blackstone controls the energy systems, the Wall Street Journal reported. The firm’s progress will be tracked by French energy and digital-automation company Schneider Electric (SU).

“We said: Now that we have the experience, the team, the capabilities and the technology, why don’t we set a real goal?” Blackstone President Jonathan Gray said. “We’re numbers-oriented people, so by putting a target on it, we give the companies something they’re really going to go after.”

Private-equity firms are increasingly focused on environmental, social and governance, or ESG, issues, driven by institutional investors. Larry Fink, CEO of BlackRock (BLK), the world’s largest money manager, recently repeated the firm’s commitment to ESG and tied it to good outcomes for stakeholders. “Those companies who focus on all their stakeholders will be the best performing companies and therefore will be providing those great returns to their shareholders,” Fink said.

Private-equity firms have been adopting ESG and impact initiatives. Last year, Blackstone announcedan initiative to deliver investment returns while addressing a variety of themes, including green technologies and sustainable communities.

Meanwhile, private-equity giants KKR (KKR) and TPG Capital have agreed to report on the ESG impacts of their investments.

Write to Leslie P. Norton at leslie.norton@barrons.com