Despite a systematic, well-funded wave of attacks against ESG at the state and federal levels in recent years, some of America’s largest financial institutions continue to move ahead on their responsible investing strategies. While banks and asset managers may appease self-serving lawmakers in the pockets of Big Oil by pointing to their support for the energy industry, behind the scenes they are sticking to their fiduciary duties and continuing to engage in responsible investing. Why? Research continues to show that sustainable funds have comparable, if not better, financial returns to traditional funds with less downside risk, with nearly 80% of impact investors reporting that their financial performance meets or exceeds their targets.
Below is a roundup of the latest responsible investing activity from financial institutions.
Blackrock ramps up investments in climate-friendly technologies, rebrands responsible investing as “transition investing.”
- As reported in Utility Dive, a joint venture from BlackRock and investment company Temasek launched its first late-stage venture capital private equity fund, Decarbonization Partners, which has since received $1.4 billion in investments and plans to invest in companies “driving intentional, material and measurable decarbonization outcomes” and companies that have “de-risked technologies.”
- The Wall Street Journal reports that BlackRock is shifting away from ESG terminology and towards “transition investing.” Despite the change in framing, “climate investing is booming at BlackRock” and the company is “wagering that fighting climate change will be a generational investment opportunity.”
Permira creates new team to invest in low carbon economy, expecting $12 trillion cumulative revenue opportunity in climate transition.
- As reported by Reuters, private equity firm Permira announced early March that they are putting together a “dedicated investment team” that will focus solely on investments in the low carbon economy and will be led by Co-Head of Climate Kush Patel, a former Blackstone executive.
Brookfield Asset Management invests $10 billion in climate transition, establishing largest private fund for the net-zero economy.
- ESG Today reports that Brookfield Asset Management raised $10 billion for a new fund focused on investing in climate-friendly technologies. The Brookfield Global Transition Fund (BGTF II) is now the “largest private fund dedicated to investing in the net zero economy.”
KKR targets decarbonization in high emission sectors, makes new investments in renewables projects.
- As reported by Semafor, KKR is targeting investments in “high emission sectors and high emitting economies” in an effort to prove that investing in the low carbon economy does not hurt investment returns.
- Last month, ESG Today reports, KKR announced that they are acquiring a majority stake in solar and storage developer Avantus. During this announcement, they continued to affirm their commitment to support the company’s growth to help push forward the development of the U.S. renewables industry.
- ESG Today also reported on KKR’s announcement to takeover Encavis, a German renewable energy platform, in a $3 billion dollar move aimed at supporting the Encavis’ project pipeline’s to capitalize on growing national and international clean energy trends.
Morgan Stanley announces acquisition of sustainable solutions provider Resource Innovations.
- ESG Today reports that this April, major investment firm Morgan Stanley announced the acquisition of a controlling share of Resource Innovations. Resource Innovations is an “energy efficiency and sustainability-focused services and solutions provider” that collaborates with actors in the energy space–including utilities, government agencies, and corporate clients–to advance decarbonization goals.
