News of mounting climate change related disasters seem to have kicked capitalism into high gear as the world’s biggest money managers are now shoveling cash into climate-focused investment funds.
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On the same day that TPG announced that it received $5.4 billion in commitments for its Rise Climate strategy, Brookfield Asset Management topped it with a $7 billion climate fund of its own.
Add that to the news earlier this month that General Atlantic was raising $4 billion for its Beyond Net Zero strategy (led by former British Petroleum chief executive Lord John Browne
Brookfield’s new “Global Transition Fund” came from investment partners Ontario Teachers’ Pension Plan Board and the Singapore-based investment firm, Temasek.
Both firms which have committed to reaching net-zero in their own operations and will be investing alongside Brookfield as well as putting money to work in the fund.
This is just the first close for both Brookfield and TPG, with Brookfield angling to ultimately have $12.5 billion to invest in climate change related businesses, while TPG is looking for a more modest $7 billion.
Neither firm’s investment vehicle even comes close to the estimated $6 trillion in annual investments that’s needed to adequately transition the global economy away from fossil fuels and reach net-zero emissions targets.
“Brookfield is committed to achieving net-zero by 2050 or sooner, and to accelerating the global net-zero transition. As the world increasingly focuses on sustainability, the required capital and investable opportunities are expanding faster than originally expected, creating an even greater opportunity for large-scale investments that address climate change and generate attractive returns,” said Mark Carney, Brookfield Vice Chair and Head of Transition Investing. “Through this Fund, we are pleased to partner with best-in-class institutions to commit the capital required to scale clean energy and catalyze companies onto Paris-aligned net-zero pathways.”
The Brookfield Global Transition Fund, will be co-led by Carney, Brookfield Vice Chair and Head of Transition Investing, and Connor Teskey, CEO of Brookfield Renewables.
The fund is Brookfield’s first impact fund focusing on investments that accelerate the global transition to a net-zero carbon economy and impact climate change while delivering strong risk-adjusted returns to investors. The Fund targets investment opportunities relating to reducing greenhouse gas emissions and energy consumption, as well as increasing low-carbon energy capacity and supporting sustainable solutions.
The impacts of climate change are being felt across the globe and stand to significantly hit the bottom lines of businesses around the world. This climate reckoning could force an unprecedented realignment of interests around planetary health.
Still, there’s more work that needs to be done and more dollars to tap. Interested investors can find out what we’re doing at FootPrint Coalition by clicking this link.