Climate Investment Newsletter 10/23 - 10/29

Individual Deals and Market Watch

Global sustainable debt set to top US$1 trillion: Moody’s [Advisor’s Edge]

• The issuance of green, social, and sustainable bonds is on track to top US$1 trillion in 2021, says Moody’s ESG Solutions. In a new report, the company said sustainable bond issuance reached $217 billion (all figures in U.S. dollars) in the third quarter, down 21% from the second quarter but up 25% from the third quarter in 2020.

HSBC has helped clients issue $170 bln of green bonds this year -Group CEO [Reuters]

• Proceeds from green bonds are typically used on projects to cut greenhouse gas emissions, adapt to climate change, increase energy efficiency or expand the use of renewable energy.

Auckland Council raises $1 billion in Green Bonds [OurAuckland]

• Auckland Council’s retail Green Bond offer last week raised $300 million, seeing the council surpass $1 billion in funds raised through the sustainable finance framework.
• The council’s initial Green Bond release in June 2018 was the first for any organisation in New Zealand and this milestone is yet another success.

AXA IM Alts raises €500m in second green bond issue [Real Assets IPE]

• AXA IM Alts has raised €500m via a green bond issue for its flagship European open-ended real estate fund. The manager said the green bond issued for AXA CoRE Europe was 4.6 times oversubscribed, attracting a €2.3m order book from 167 European and international institutional investors.

SK plans USD-500m investment in Bloom Energy, expands partnership [Renewables Now]

• An affiliate of South Korean conglomerate SK Group has signed a contract to deploy at least 500 MW of power from Bloom Energy (NYSE:BE) through 2024, representing an estimated USD 4.5 billion (EUR 3.87bn) in equipment and service revenues.

World Fund is a new €350M climate VC fund incubated by green search engine Ecosia [Tech Crunch]

• It contains over 60 investors including current and former European tech founders, but also very few institutional LPs, hence why it could raise in such a relatively short time.
• Incubated by Ecosia, the fund will focus on energy, transport, food and agriculture, manufacturing and buildings. As we’ve seen, the built environment is a huge contributor to CO2. Cities consume over two-thirds of the world’s energy and account for more than 70% of global CO2 emissions.

Walmart heir Lukas Walton launches $300M climate fund with Chicago VC firm [Memphis Business Journal]

Reliance launches USD-245m public offer for shares in Sterling & Wilson Solar [Renewables Now]

• Reliance New Energy Solar Ltd, part of Indian conglomerate Reliance Industries Ltd (BOM:500325), has made an open offer to acquire a 25.9% stake in domestic solar EPC contractor Sterling and Wilson Solar Ltd (BOM:542760) for roughly INR 18.4 billion (USD 245m/EUR 211m) in cash.

Foresight launches £200m sustainable forestry IPO [Investment Week]

• Foresight Sustainable Forestry Company has launched its initial public offering on the London Stock Exchange, with a target issue of 200 million shares, at a price of 100p per ordinary share.

Climate Tech SaaS Startup Persefoni announced $101M in Series B and launch of free carbon accounting product [Cision]

• Persefoni, the leading Climate Management & Accounting Platform (CMAP) for enterprises and financial institutions, today announced it has raised $101 million in its Series B financing round. Prelude Ventures and The Rise Fund led the round with first-time participation from Clearvision Ventures, Parkway Ventures, Bain & Co., EDF Group through its corporate venture arm EDF Pulse Holding, Sumitomo Mitsui Banking Corporation (SMBC), The Ferrante Group, Alumni Ventures Group, and New Valley Ventures. Existing investors including NGP Energy Technology Partners, Sallyport Investments, and strategic angels also returned to participate. The round is the largest in Climate Tech history for a SaaS company.

Wave of investment just the beginning for EV battery recycling [Waste Dive]

• Within the last month, four lithium-ion battery recyclers saw a collective $255 million worth of investment and another completed a merger.

Macro Commitments

Canadian investors representing $5.5 trillion send an unprecedented call for increased climate accountability in the corporate sector [Business Wire]

• Citing their fiduciary responsibility, 36 institutional investors managing $5.5 trillion in assets have signed a new Canadian Investor Statement on Climate Change. The Statement, signed by asset management divisions of five of Canada’s largest banks along with major institutional investors such as the Ontario Pension Board, calls on companies to act on material climate risks including through their industry association and lobbying activities.

Salesforce announces $300 million in nature investments as climate action ramps up [Forbes]

• Marc and Lynne Benioff and Salesforce have announced $300 million in climate investment for ecosystem restoration and reforestation. The funds include the establishment of the $100 million Benioff TIME Tree Fund, $100 million in investments from TIME Ventures, the Benioffs’ investment fund, and $100 million from Salesforce to provide grants, donate technology through its Power of Us program and support 2.5 million hours of volunteer time to non-profits focused on climate action.

Standard Chartered to offer US$300 billion for green, transition financing as part of net zero plan [South China Morning Post]

• Standard Chartered said it will deploy US$300 billion for green and transition financing in the next decade and simultaneously seek to cut the emissions associated with its lending to carbon-intensive sectors, such as oil and gas, as part of its efforts to reach net zero carbon emissions by 2050.

Dutch pension giant spurns fossil fuels as funds shift before COP26 [Reuters]

• Dutch pension fund ABP will divest 15 billion euros ($17.5 billion) of investments in fossil fuel producers by 2023, as many of the world's biggest investors set out new climate policies ahead of next week's COP26 summit.

China targets more than 80% non-fossil energy use by 2060 [Bloomberg Green]

• The measures are part of China’s larger plan for achieving peak carbon emissions and reaching net-zero by 2060, Xinhua said on Sunday. It reiterated the government’s climate goals for 2025 and 2030 and vowed to accelerate a decline in China’s coal use.

Conservation International to Serve as Impact Adviser for TIG’s New $1 Billion Reforestation Strategy in Latin America [Business Wire]

• Through a collaboration announced last week, Conservation International will serve as an impact adviser to BTG Pactual Timberland Investment Group’s (TIG) new impact-oriented reforestation investment strategy in Latin America. The strategic collaboration seeks to mobilize US$ 1 billion over five years and deliver significant climate, environmental and social benefits at a large scale, alongside financial returns.

Pathways, Frameworks, Case Studies, Research, Climate Science

Global $4.9 bn carbon capture and storage markets to 2026: U.S. market is estimated at $1 billion in 2021, while China is forecast to reach $482 million by 2026 [Yahoo Finance]

• Amid the COVID-19 crisis, the global market for Carbon Capture and Storage estimated at US$2.8 Billion in the year 2020, is projected to reach a revised size of US$4.9 Billion by 2026, growing at a CAGR of 9.9% over the analysis period.

COP26: Paris Article 6 can generate $1 trillion/year of capital flows by 2050: IETA [S&P Global]

• Article 6 is a key outstanding element of the Paris "rulebook" that has yet to be agreed by countries and could be a breakthrough item at the UN Climate Change Conference in Glasgow running Nov. 1-12.
• Agreement on the rules could bolster interest in the market for voluntary carbon offsets and unleash a wave of investment and liquidity in the market, which is tipped to grow by a factor of at least 15 by 2030.

Using nature in infrastructure projects could save USD 248 billion per year—study [IISD]

• Governments and investors could save USD 248 billion a year, protect the environment, and benefit local communities by replacing or complementing newly built infrastructure with plants, trees, and other natural alternatives, according to a first-of-its-kind study from the International Institute for Sustainable Development (IISD).

Climate tech startups have raised a record $32 billion in 2021 [Fast Company]

• Climate tech startups have raised more money in 2021 than in any year before—and nearly five times more than in 2016, just after the Paris climate agreement was signed. This year, so far, climate-focused startups have raised $32 billion, according to a new report from Dealroom and London & Partners.
• London now boasts $28bn worth of climate tech startups - more than anywhere else in Europe [City A.M.]
• London is second only to Silicon Valley in terms of the size of its ecosystem of climate tech companies, which is brimming with 416 such startups, according to a new report by London Partners and Dealroom.

Climate finance for poor countries to hit $100bn target by 2023, says report [The Guardian]

• The longstanding target for providing climate finance to the developing world will be met within two years, according to a report ahead of the UN Cop26 climate summit.

World needs $5 trillion in annual climate finance by 2030 for rapid action [Reuters]

• Climate finance needs to rise sharply to $5 trillion a year globally by 2030 to fund measures to fight climate change, researchers said, warning that transformation across economies is too slow to meet international temperature goals.
• From transport to agriculture and electricity, progress is lagging in all sectors on reducing planet-heating emissions at the pace required to limit global warming to 1.5 degrees Celsius and avoid its worst effects, a study by five green groups found.