Border to Coast, which manages a pool of more than £40 billion ($51 billion; €47 billion) on behalf of UK local government pension schemes, has committed capital to a number of private markets climate funds from its £1.35 billion climate opportunities allocation.
The investor made a $110 million commitment to BeyondNetZero, the climate investment arm of General Atlantic, it said in its annual climate change report. It has also backed the Clean Hydrogen Infra Fund, a joint venture between clean hydrogen investor FiveT Hydrogen and private markets firm Ardian, with a commitment of €100 million.
The other climate-focused private markets commitments in Border to Coast’s portfolio are:
- $144 million to Blackstone’s Green Private Credit Fund III, which is expected to close imminently on more than $7 billion
- $150 million to Brookfield’s Global Transition Fund, the $15 billion climate fund that held a final close in June 2022
Border to Coast manages a pool of assets on behalf of 11 UK public pension schemes – primarily in the North of England – which are also its shareholders.
According to its latest climate report, it has already invested around £6.9 billion in climate solutions across its entire portfolio; one of its largest public company holdings is in Gresham House Energy Storage Fund, a UK battery storage business.
For its private markets commitments, Border to Coast expects managers to “demonstrate how their investments are expected to have a positive climate impact and how this will be measured and reported”, it said in its report.
“We would also like to see some alignment of fees with delivery of positive climate impacts, as well as with financial performance,” the report continued.
Border to Coast aims to increase the amount of capital it has allocated to climate solutions, but notes in its report that this is dependent on the allocation decisions of its member funds. “Due to data availability issues and the absence of an industry-standard definition, we have not set an explicit target,” the authors wrote.
Private markets has lagged other asset classes when it comes to the provision of climate-related portfolio data, an issue that Border to Coast has raised before.
“We know that private markets are a long way behind listed equity, but there is a willingness within the industry to come together and agree a set of metrics and a standardised methodology to report against,” wrote Mark Lyon, deputy CIO, in the investor’s climate report.
Border to Coast has signed up to the ESG Data Convergence Initiative, an industry-led voluntary data standard that has gained widespread support.