Last week, we published a list of eight asset owners with climate finance allocations. Each of these allocations span multiple asset classes: private markets and sometimes listed markets too. What does this tell us?

Asset owners recognise that mitigating climate change requires various types of investment. NN Group, for example, is deploying real estate capital to create new energy efficient housing stock. The UK Environmental Agency’s pension fund, meanwhile, is looking for climate debt funds because “transition financing… is largely going to come from debt”.

While the above examples fit within the existing definitons of asset class allocations, some investors have taken a more flexible approach. Border To Coast’s Climate Opportunities pool, for example, has an overall 8 percent return target and can adjust its sub-strategy allocations “depending on our view of market conditions”, chief investment officer Mark Lyon tells me.

This resonates with a call-to-arms issued by Just Climate, which plans to manage several multi-strategy funds. At PEI Group’s Impact Investor Global Summit last year, Just Climate’s Clara Barby called on investors to “let go of the asset allocation buckets that have become so rigid”.

Others on our list have gone even further, segregating capital by climate themes rather than asset classes defined by risk, returns and investment horizons. USS, for example, has a ‘wishlist’ of climate sectors, such as carbon sinks, renewable energy and electric transportation, rather than asset classes. Canada’s Public Sector Pension Investment Board differentiates “green assets” – low-carbon investments, for which it has earmarked C$70 billion ($52 billion; €48 billion) – from “transition assets” – heavy emitters under mitigation plans, for which it has earmarked C$7.5 billion.

Such investors recognise that transforming carbon-intensive, asset-heavy industries “requires solutions that currently don’t exist at scale”, says Lydia Guett, impact specialist at Cambridge Associates.

To meet global ambitions to limit climate change, we need to scale new technologies while simultaneously investing in asset-heavy, infrastructure-like assets. This capital needs to be well-co-ordinated and flexible. It’s heartening to see investors accounting for this.