NZ Super invests in US climate fund

Following a strategic shift from responsible investment to strategic finance and reorienting to a Paris-aligned index, the NZ Super Fund has committed $157 million to a US fund that will invest in climate change solutions.

Monday, January 9th 2023, 2:15PM

by Andrea Malcolm

Global independent Wellington Management’s Climate Innovation Fund I (CIF) will invest in companies developing products and solutions for climate change mitigation and adaptation. The fund aims to produce non-concessionary venture capital/growth returns by investing in Series B and C rounds of financing, mainly across North America and Europe.

In impact investing, non-concessionary refers to funds that promise both ESG-aligned outputs and at least market returns.

Sectors targeted by Wellington Management’s CIF include energy transformation, sustainable buildings and cities, transportation and mobility, industrial and enterprise efficiency, and food and agriculture.

Del Hart, head of external investment and partnerships for the Guardians of New Zealand Superannuation, the crown entity that manages the NZ Super Fund, says CIF’s focus on financial returns and positive environmental impacts matches the NZ Super Fund’s sustainable investment philosophy and objectives.

She says Wellington’s research-led approach, including partnering with Massachusetts Institute of Technology, is also aligned with the NZ Super Fund approach and there is potential to expand into co-investments in successful portfolio companies.

The CIF investment follows NZ Super Fund’s commitment to invest US$100 million in US-based Fifth Wall Climate Technology Fund to decarbonise the real estate industry, €125 million invested in sustainable energy infrastructure via Copenhagen Infrastructure Partners’ Energy Transition Fund, and in Generation Investment Management’s Sustainable Solutions Fund IV.

Following a two year review on responsible investment (RI) which looks at ESG risk, in July the Super Fund announced it is shifting its investment strategy from RI to sustainable finance which considers the impact of investments on society and the environment as well as the ESG risks on investment.

In 2021 the NZ Super Fund signed up to a global best practice framework to help it achieve net zero carbon emissions by 2050.

Tags: NZ Super