Transitioning

This is a story of institutional investors stepping forward to accelerate the shift to a net-zero carbon economy. It is surely an encouraging development, demonstrating that not all, or even most, of the funding for economic adaptation to a greener world needs to come from governments. Individuals and companies can act on it too.

Canada’s Brookfield Asset Management Inc. announced this morning significant funding of its Global Transition Fund, a partnership whose mandate is to invest in entities that modify their operations so as to reduce greenhouse-gas emissions, decrease energy consumption, or increase low-carbon energy capacity. The Fund is co-managed by Mark Carney, former Governor of first the Bank of Canada and then the Bank of England, and Connor Teskey, CEO of Brookfield Renewables.

Brookfield’s funding goal for its Transition Fund is US$12.5 billion, which would make it the world’s largest pool of private money addressing climate change. About $7 billion is now committed, principally from Ontario Teachers’ Pension Plan Board, and Temasek, Singapore’s sovereign wealth fund, both of which will also invest directly along with the Fund, and both of which have pledged to achieve zero emissions in their holdings by 2050.

In a statement, Mark Carney clearly described the strategy and challenge of the Fund. “Enabling the transition will require global reach, large-scale capital, and deep operating expertise in renewable energy and decarbonization.”

No doubt Mr. Carney will have much more to say as he prepares, in his other role as United Nations Special Envoy on Climate Action and Finance, for November’s United Nations climate summit in Glasgow.