Inst’l Investor Appetite for Clean Tech, Impact Investing Grows

Big institutional investors and foundations are stepping up their commitments to sustainable investing and clean tech projects, creating new sources of capital for startups, developers and fund managers. This growing trend is expected to mobilize trillions of institutional investor capital the clean tech industry needs to scale, and it was a key theme in the ARPA-E Summit panel discussion earlier this year, titled “Where’s the Money? Current and Future Trends in Energy Investment.”

Further commitments to sustainable investing and clean tech initiatives by institutional investors, foundations, and family offices is a key industry trend that CleanTechIQ will continue to track in our research. 

Here’s a roundup of the latest committments:

- The Rockefeller Fund invested $10 million in Mainstream Renewable Power to expand renewable energy in Africa. Of the fund’s $816 million under management, about $98 million have gone to so-called “Impact Investments,” including the stake in Mainstream as well as positions in vehicles like the New Energy Capital Infrastructure Credit Fund, according to Bloomberg. The fund is looking to sell all of its investments in fossil fuel companies by the end of 2018 and is looking to invest in renewable energy and battery storage projects, and may consider early stage venture capital in the future, said the fund’s president.

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- Norway’s $830 billion sovereign wealth fund, the world’s biggest, dropped investments in 27 companies with links to coal last year as part of a policy to combat climate change, prompting campaigners to urge other big investors to follow suit, says Reuters.  According to the fund’s CEO, speaking at an event in 2014, the fund planned to accelerate investments in renewable energy, waste management and energy-storage companies, Bloomberg reported.

- The California Public Employees’ Retirement System, the largest public pension fund in the US, doubled the limit for its real assets staff to make discretionary investments last month, to $3 billion, according to Pensions & Investments.  This comes after the pension in March took a 25 percent stake in Desert Sunlight Investment Holdings, which owns two solar photovoltaic power generation facilities near Palm Springs with a capacity of 550MW.

- The California State Teachers’ Retirement System took a significant step toward a sustainable investment portfolio with its decision in July to commit up to $2.5 billion to low-carbon index strategies. The pension also announced plans to issue sustainable investing mandates, which includes increasing its investments, to $3 billion from $1 billion, with asset managers that are committed to sustainable environmental practices, according to Pensions & Investments.

These recent moves follow other commitments to sustainable investing from big institutional investors over the past year, including:

  • The University of California committed $1 billion to early-stage and scale-up investments in clean energy innovations over the next five years and joined the Bill Gates led Breakthrough Energy Coalition in 2015.
  • The president of the Ford Foundation announced changes to its investment policy to focus on the social ramifications of its investments and that it will integrate Environmental, Social, and Governance (ESG) factors into its portfolio.
  • Zurich Insurance announced late last year that it is allocating up to 10 percent of its private equity investments to impact private equity funds, including  investments that “Help mitigate environmental risks by supporting a low-carbon economy and encouraging environmentally friendly technologies.”

 

 

 

 

 

 

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