Big Institutional Investors Announce New Funds for Clean Energy

There were some major new funding announcements last week during the UN Climate Summit and Climate Week NYC, as governments and financial institutions promised more than $200B in climate financing by the end of 2015.

Additionally, some of the world’s biggest institutional investors managing over $24 trillion in assets urged governments to institute more aggressive policies, move towards carbon pricing, and phase out fossil fuel subsidies in order to drive greater investment into clean energy, energy efficiency, and green infrastructure.

Here’s a wrap up of the major announcements by investors, banks, and corporations:

Dutch public pension manager APG Asset Management, with $377B in assets, said that it will double investments in “sustainable energy generation” to $2.6B over the next 3 years, including investments in sustainable real estate, solar, and wind.

The California State Teachers’ Retirement System pension fund (CalSTRS,) which manages $188B assets, announced plans to triple its investments in “clean energy and technology” to $3.7B over the next five years. It currently has $1.4B invested in cleantech, with $500M in the sector through private equity and $200M through infrastructure, including solar, wind and hydro projects.

The California Public Employees’ Retirement System (CalPERS), the largest public pension fund with $360B in assets, signed the new Montreal Carbon Pledge, committing to measure and disclose the carbon footprint of its investment portfolio. Several other large pension funds, totaling $850B in assets, signed the pledge as well, which will be overseen by the U.N. Principles for Responsible Investing.

And the movement to divest from fossil fuels by endowments, foundations, and corporations gained steam, with the Rockefeller Brothers Fund announcing that it is divesting its $860M philanthropic fund of investments in fossil fuels and focusing more on clean energy. They join Stanford University’s endowment, which divested from its coal investments in May.

In fact, a recent report by Arabella Advisors showed that 181 institutional investors have pledged to divest from fossil fuels so far, more than doubling the count since January.

And University of North Carolina at Chapel Hill’s board of trustees passed a resolution last week directing the university’s $2.4B endowment to focus on clean energy investments over fossil fuels, although there’s no plan to divest at the moment.

New York hatched plans to launch a 10-year, $5B Clean Energy Fund to invest in distributed generation, energy efficiency, and transportation projects that it hopes will reduce greenhouse gas emissions by 50% in the state by 2030 and make New York a national clean energy leader. The fund will replace state mandates set to expire next year, and is designed to attract private capital to will replace taxpayer funding of clean energy projects.

Getting into the spirit, Bank of America announced plans to attract $10B of new investments into energy efficiency, renewable energy, and energy access. Through its new Catalytic Finance Initiative, the bank committed $1B to develop investment structures and de-risking tools and will work with development finance institutions, insurance firms, foundations, impact investors, and institutional investors on the initiative.

And Barclays’ announced that it will invest $1.3B in green bonds to finance environmentally friendly projects by November 2015 making it one of the largest commitments to green bonds by a bank.

Offering a boost to clean energy adoption, some big corporations committed to powering their operations using 100% clean energy by 2020 as part of a new campaign called RE100. Companies that have committed include: IKEA, Mars, Swiss Re, Philips, BT, Commerzbank, H&M, Nestle, and Reed Elsevier, and they plan to sign up 100 of the world’s largest companies to join as well.

 

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