Generation Investment Management, former US vice-president Al Gore, Harvard Management Company and other foundations have partnered to create a climate-focused impact investment firm.
Just Climate will consider debt, growth equity, venture capital, real asset development and real asset management strategies, the firm’s chief investment officer, Shaun Kingsbury, told New Private Markets. He said Just Climate will focus on four sectors: energy, transportation and mobility, buildings and industry.
“We’re trying to create a new climate transition asset class” to invest in a future in which global warming is limited to 1.5 degrees Celsius, Kingsbury noted. “We start with where the climate needs investment, but we always seek the appropriate risk-adjusted return. And we expect to have long-dated and flexible capital, so if we need to invest in a company or a project or provide debt financing for a project, we can.”
Just Climate will raise capital for several funds focused on different sectors within the climate transition, according to a source familiar with the firm’s plans.
Kingsbury declined to comment on whether Just Climate has planned to raise external capital.
Gore will serve as chairperson of Just Climate’s climate impact advisory group. The new firm’s “strategic partners” are Harvard, which has assets worth $53.2 billion; the Ireland Strategic Investment Fund, which has assets worth €12.7 billion; IMAS Foundation, which has assets worth €11 billion; the Microsoft Climate Innovation Fund; and Goldman Sachs Asset Management’s Imprint Group. Kingsbury declined to say whether these foundations had invested in the firm or its funds.
Just Climate has developed a framework to measure its investments’ climate impact, which the firm will apply to each investment during due diligence and the life of the investment, said Kingsbury. It will set impact targets for each company it invests in and will provide LPs with annual reports on the impact performance of the assets against these targets, he added.
The firm has acquired around 10 staff from Generation IM, a sustainability-focused private equity firm managing assets worth $36 billion. Just Climate is hiring investment and portfolio management talent, and it is set to open an office in London and is likely to open one in New York, said Kingsbury.