Climate Finance | September 21, 2021

On climate action, private investors urge governments to jump in (the water is warming)

Amy Cortese
ImpactAlpha Editor

Amy Cortese

ImpactAlpha. Sept. 21 – Many government leaders are being coy about their climate ambitions. Private funders are stepping up theirs. 

“My message here today is: The money for ambitious climate action is there. The private financial sector is being transformed,” Mark Carney, now a UN special envoy, said to open Climate Week NYC. Added the former head of the Bank of England, “Ambitious climate action is not just possible, it will be profitable if countries act.” 

Exhibit A: Corporations and banks put up $1 billion for Breakthrough Energy Catalyst to drive down costs and spur commercial adoption of critical emissions-reduction technologies. The blended finance fund, launched by the Bill Gates-backed Breakthrough Energy, is keying on direct air capture, green hydrogen, long-duration energy storage, and sustainable aviation fuel. 

Last month, Catalyst pledged – contingent upon passage of the U.S. Infrastructure Investment and Jobs Act – to mobilize $1.5 billion over three years to kickstart demonstration projects across the initiative’s four focus areas.  

Microsoft, General Motors, American Airlines, ArcelorMittal, Bank of America and Boston Consulting Group put up equity capital and made pre-purchase commitments, known as offtake agreements. 

“The steel industry knows how to decarbonize,” said ArcelorMittal’s Aditya Mittal. “What is missing is the availability of clean energy at competitive prices that provides the foundation for us to really accelerate.” 

BlackRock, through its philanthropic arm, is providing a grant of $500 million over five years. “We’re not doing this to make money,” BlackRock’s Larry Fink told Bloomberg News. “We’re doing this to seed these ideas, to rapidly accelerate ideas.” 

Getting it done

Climate Week, and a parallel meeting of the United Nations General Assembly, is meant to prod countries ahead of the COP26 global climate summit in Glasgow in November.

The announcement kicked off a busy week of climate announcements, deal making and negotiations in the run-up to COP26 in Glasgow in November.

Hot air. Investment consultants are jumping on the net zero bandwagon. A dozen firms that advise institutions representing $10 trillion in assets have launched the Net Zero Investment Consultants Initiative. Cambridge Associates, JANA, Willis Towers Watson, bfinance, Wilshire and the others say they will help clients identify climate risks and reduce emissions, and engage with regulators and policymakers to support the net-zero transition.  

Procter & Gamble, HP, Salesforce, ASOS, and Nespresso are among the 86 new signatories to the Climate Pledge backed by Amazon and Christina Figueres’ Global Optimism. That brings to 200 the companies that have agreed to zero out their emissions by 2040. 

Decarbonization tools

French utility Engie debuted Ellipse, a “carbon intelligence platform” to help businesses track their emissions footprints and optimize decarbonization investments… The nonprofit Circulate Initiative released a Plastic Lifecycle Assessment Calculator to assess the climate impact of waste management practices in Asia, from open burning to recycling. The open-source tool was developed in partnership with Singapore’s Agency for Science, Technology and Research… Oliver Wyman and the Climate Group collaborated on “Getting Real, a blueprint for a commercially smart climate transition,” to help companies turn ambitious climate commitments into tangible outcomes… research firm Carbon Tracker will detail oil and gas companies most exposed to climate risk in stranded assets with “Stranded assets and the implications of Net Zero 2050 for upstream oil and gas.”