Just Climate, the climate-led investing offshoot of impact firm Generation Investment Management, is nearing the $1 billion target for its first fund, affiliate title New Private Markets has learned. The fund is a growth equity strategy focused on industrial decarbonisation, taking minority stakes in asset-heavy businesses. It will hold onto these assets for between three and five years.
Just Climate is expected to close the fund later this year at its $1 billion target. The firm is also “considering” a second fund focused on nature-based decarbonisation and biodiversity, multiple sources have told New Private Markets.
Just Climate and Generation IM declined to comment on any fundraising plans.
Just Climate is seeking to back proven technologies that can contribute to the decarbonisation of carbon-intensive industries such as transportation and mobility, steel and concrete production, chemicals production, and energy efficiency within industries, chief investment officer Shaun Kingsbury told New Private Markets this week.
The business so far has made investments in electric vehicle charging company ABB E-mobility; H2 Green Steel, which is plotting a green hydrogen-powered steel manufacturing plant; and Meva Energy, a biogas energy producer. “They’re a kind of infrastructure, but the kind of risks involved make it too early for infrastructure,” said Kingsbury of these deals. Just Climate expects a higher return than core infrastructure assets, he added.
Within the energy sector, Just Climate looks at solutions to the “harder-to-abate” areas; these solutions would include technologies like green hydrogen, carbon capture and storage and long-duration energy storage. This is as opposed to the development of more renewables stock and lithium-ion battery storage, said Kingsbury.
Meva Energy manufactures gasification systems – technologies that turn organic waste products into energy. These can be installed at buyers’ industrial plants. Just Climate is now Meva’s largest shareholder.
Within the transportation and mobility sector, it is seeking electrification of heavier vehicles such as trucks, aviation and shipping, and cutting down “last mile” delivery emissions, as opposed to electric vehicles and EV charging infrastructure, said Kingsbury. ABB E-mobility, based in Switzerland, will use the capital to “accelerate the deployment of its solutions ranging from smart chargers for the home to high-power chargers for highway stations of the future, solutions for electrification of fleets and opportunity charging for electric buses and trucks”, a press release from Just Climate states.
Just Climate is notable for pursuing a strategy of investing thematically, straddling orthodox asset classes and seeking large tickets of institutional capital. Senior partner Clara Barby last year called on institutional investors to “let go of the asset allocation buckets that have become so rigid”, because Just Climate “want[s] to be able to invest in company equity and project equity. They have different levels of risk and different returns profiles”.
Barby acknowledged that marketing such a strategy is “a harder conversation” for pension funds, which typically have separate private equity and infrastructure teams and risk/return mandates.
Just Climate was established in 2021 as a climate-focused investment business operated by Generation IM, the impact firm co-founded by former US vice-president Al Gore and former head of Goldman Sachs Asset Management David Blood. Blood is chairperson of Just Climate and Gore chairs its impact advisory council. Just Climate has been on a hiring spree: it has recruited talent from Morgan Stanley, Helios Investment Partners and Bridges Fund Management since its launch.