Just Climate Announces Close of Inaugural $1.5 Billion Industrial Climate Solutions Fund
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Just Climate, an investment business established by Generation Investment Management to address the net-zero challenge at scale, has announced the closing of its inaugural fund, Climate Assets Fund I. The Fund exceeded its $1 billion target, raising $1.5 billion in institutional capital to invest in the highest impact solutions that can radically reduce or remove emissions, while generating attractive risk-adjusted financial returns.
The Fund closed with a diverse set of institutional investors with a far-reaching geographical spread, including California State Teachers’ Retirement System (CalSTRS), PSP Investments, AP4, Colonial First State Investments, Builders Asset Management and AP2; as well as other pensions, sovereign wealth funds, insurers, financial institutions, endowments, foundations and family offices from North America, Europe and the Asia Pacific region.
The Fund’s founding investor group included Microsoft’s Climate Innovation Fund which anchored the Fund, IMAS Foundation, Ireland Strategic Investment Fund, Harvard Management Company, the Imprint Group of Goldman Sachs as well as Hall Capital Partners and its clients.
Clara Barby CBE, Senior Partner of Just Climate, said: “Establishing climate-led investing as a capital allocation imperative is core to our mission. 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. We’re grateful that many of the world’s most significant institutional investors see the opportunity that climate-led investing represents — for capital markets, for the planet and for people everywhere.”
The Fund will be part of Just Climate’s industrial climate solutions focus and will pursue investments in growth-stage, asset-heavy companies globally which have the potential to deliver transformational climate impact across some of the highest-emitting, hard-to-abate industries — including energy, mobility, industry and buildings — in order to generate outsized emissions abatement in the next decade.
Shaun Kingsbury CBE, Chief Investment Officer of Just Climate, said: “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, which are the building blocks of our economy, there will be no net zero by 2050. 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.”
Just Climate has made three investments from the Fund to date, in:
- ABB E-mobility – a Swiss-based global leader in electric vehicle (EV) charging solutions.
- H2 Green Steel – a Sweden-based industrial start-up which aims to accelerate the decarbonisation of the steel industry.
- Meva Energy – a Sweden-based provider of an innovative gasification technology to generate renewable energy for manufacturing sectors.
Just Climate’s integrated approach to impact management is embodied in the Fund’s long-term incentive structure. Under the Fund’s integrated performance fee, financial returns drive the amount of performance fee accruable. How much of the performance fee is ultimately available is 100% linked to the delivery of ambitious greenhouse gas abatement goals. With this approach, Just Climate is demonstrating its conviction that climate solutions for the hard-to-abate industries are capable of delivering attractive risk-adjusted returns and highest climate impact.
Since being established by Generation Investment Management in October 2021, Just Climate has built a team of investment professionals who combine skills in growth equity, project finance, engineering and impact measurement with the capabilities to find and support business models that can provide transformational solutions for the hard-to-abate industries.
Weil, Gotshal & Manges LLP served as fund counsel. Aztec Financial Services (Luxembourg) S.A. is administrator for the Fund.