Just Climate raises $1.5 billion with help from Microsoft fund

LONDON (Reuters) – Asset manager Just Climate said on Thursday it had raised $1.5 billion for its inaugural fund after strong demand from institutional clients including Microsoft’s Climate Innovation Fund helped it beat the original target of $1 billion.

Established by Generation Investment Management, Just Climate aims to focus investment on the sectors where cutting greenhouse gas emissions is hardest to do, such as cement, shipping, industrials and land use.

“More than 50% of the world’s emissions come from the hard-to-abate industries. Without radical and urgent changes to the way that the financial sector approaches the decarbonisation challenge in these industries… there will be no net zero by 2050,” Just Climate Chief Investment Officer Shaun Kingsbury said in a statement.

The firm’s initial fund, Climate Assets Fund I, will focus on helping companies with proven technology scale their business to a level to attract more risk-averse investors.

“Proven, transformational climate solutions are being developed to decarbonise the industrial sectors. With the right investment support, we believe they can scale rapidly to achieve better gross margins, a lower cost of capital and widespread market adoption,” Kingsbury added.

Among other investors to back the fund include IMAS Foundation, Ireland Strategic Investment Fund, Harvard Management Company, California State Teachers’ Retirement System, and Colonial First State Investments.

Initial investments from the fund include electric vehicle charging company ABB E-mobility, industrial startup H2 Green Steel, and Swedish gasification technology firm Meva Energy.

“We start with climate impact, identify solutions that will make the biggest difference, and then direct and scale institutional capital to those solutions that we believe can generate attractive risk-adjusted returns,” added senior partner Clara Barby.