In brief: What’s in a climate label?

Climate funds are now a fixture of the investment landscape, but what are the these funds actually investing in? A new report from MSCI has sought to answer this question. The analysis company has put together data on funds with climate related names – including terms such as impact, sustainable and energy transition – from both public and private markets. A few takeaways for New Private Markets readers:

• MSCI found a total of 173 private markets funds with climate-related names as of Q3 2023 and before COP28. In total, these have received $90.5 billion of capital. There were 1,342 publicly listed climate ETFs and mutual funds with AUM totalling $526 billion.
• More capital has been raised for infrastructure climate funds than any other private markets asset class. However, venture capital has seen the largest number of funds raised: the asset class represents 29 percent of all private markets climate funds.
• Almost two third (64 percent) of NAV across private climate funds was focussed on utilities and heavy industry. Within utilities, renewable energy alone accounted for 41 percent. By contrast, information technology was the most common focus for public funds, followed by industrials.