Venture is trying to allocate capital into areas it says are falling through the cracks of environmental investment strategies.
A venture set up by Al Gore’s Generation Investment Management has attracted $200 million in new money for a strategy that targets the restoration of land degraded by farming and deforestation.
Just Climate, which was established by Generation in 2021, got allocations from investors including Royal Bank of Canada, Achmea Investment Management and the Environment Agency Pension Fund, it said in a statement on Tuesday. The money will be deployed in its natural climate solutions initiative, and comes on top of $175 million raised earlier this year.
The venture, which counts Microsoft Corp.’s Climate Innovation Fund and the California State Teachers’ Retirement System as anchor investors, is trying to allocate capital into areas it’s identified as falling through the cracks of environmental investment strategies.
Eduardo Mufarej, Just Climate’s co-chief investment officer, says that despite the emissions impact of agriculture, forestry and other land use, only a fraction of the capital raised by global climate funds is deployed to tackle the issue. Addressing that imbalance is “the underlying case for our investment strategy,” he said in an interview.
Harmful agricultural practices, such as overuse of chemical pesticides, forest destruction and food systems, are responsible for as much as a third of the world’s greenhouse gas emissions. Investments targeting this area are “not only relevant and attractive from a climate impact standpoint, but they’re very attractive from an investment standpoint,” Mufarej said.
Just Climate also said it’s invested in Indian agri-tech platform, AgroStar, and is working on an active pipeline that includes another transaction that’s expected to close within the next six to nine months, he said.
In the first ever gathering of asset owners as part of the official agenda of a United Nations climate summit, investors in Brazil this month discussed physical risks posed by climate change, the science of so-called tipping points and the risks to portfolios from breaching those limits, according to Clara Barby, senior partner of Just Climate who worked with the COP30 Presidency to help convene the UN meeting.
Climate change and environmental degradation are long-term issues that are too big for institutional investors to ignore, she said.
“If you look at these kinds of sectors, whether it’s water treatment or waste, or decarbonizing agriculture, and you look at scenarios as an asset owner about how the world is going to change, there is a very interesting return opportunity in solutions for those issues,” Barby said. “And so that’s just a more pragmatic alpha opportunity as a starting point.”
Just Climate also has a strategy focused on investments tied to decarbonizing heavy industry. Generation was founded two decades ago by Gore, a staunch advocate of addressing climate change and ex-US vice president, together with David Blood, a former Goldman Sachs Group Inc. executive.
Generation, which manages about $31 billion, said in an August filing that overall profits were little changed at just over £157 million ($206 million) in 2024. The share of profits distributed to all the firm’s members fell to £89 million from £96.6 million in the previous year, the report said.
The S&P Global Clean Energy Transition Index fell 27% in 2024, but has since seen a rebound, gaining more than 40% year-to-date.
There are several “fiduciary arguments” for investing in climate solution, which “when you add them all together, make it particularly compelling,” Barby said. There’s a “beta argument at portfolio level” for asset owners to look for climate solution investments across all the asset classes where they have holdings, from real estate to public equities, and then “there’s just the pure risk argument,” she said.
© 2025 Bloomberg L.P.
link
