Generation IM launches new climate investment house in bid to boost real-economy decarbonisation

Just Climate will have global unlisted mandate and will prioritise climate impact over risk/return assessment

Sustainable finance specialist Generation Investment Management has launched a second investment house with backing from six investors, including Ireland’s sovereign wealth fund.

Just Climate seeks to “catalyse and channel capital to companies and projects which have the potential to deeply decarbonise our economy, but which are not yet fully served by traditional investment mandates,” according to the announcement. 

Founding investors, who will allocate capital to the firm’s strategies as they develop, include the Ireland Strategic Investment Fund, Microsoft’s Climate Innovation Fund, Harvard Management Company, Ikea’s  IMAS Foundation, Hall Capital Partners, and Imprint Group – the impact arm of Goldman Sachs Asset Management.

Still fundraising, Just Climate is expected to make its first investments later this year, and claims it will incorporate climate impact into its fundamental investment calculations.  

“We’re going to focus first on identifying the most impactful climate opportunities that are not yet being funded, and from then on, it's a traditional approach to allocating capital in terms of risk and return,” said David Blood, who will chair the new venture.  

Blood is a Senior Partner and co-Founder of Generation, which he set up with former US Vice President, Al Gore, in 2004.  

Gore will chair Just Climate’s ‘climate impact advisory group’. Former CEO of the UK’s state-backed Green Investment Bank, Shaun Kingsbury, has been appointed Chief Investment Officer; and Colin le Duc, another founding partner of Generation, will be Vice Chair. 

“The ESG movement has been very good at optimising risk and return,” le Duc told RI. “What it has not been so good at is delivering impact, and that’s the bit that needs to change if we are going to make it to Net Zero. It's a fallacy to believe that the current way that the markets are structured will allow for full decarbonisation.” 

Just Climate will have a global remit, but will emphasise investments in emerging markets as part of its mission. It will pursue unlisted investments – mainly private equity – with a 15-year investment horizon.