HSBC Global Asset Management and climate change advisory and investment firm Pollination Group are teaming up to launch a series of billion-dollar funds that will target "natural capital."The new venture, which will be called HSBC Pollination Climate Asset Management, is the largest of its kind. It will target institutional investors including pension funds and sovereign wealth funds.
There are many energy and climate-focused funds on the market, but what sets this new partnership apart is its scale, as well as its focus on natural capital specifically. In the simplest terms, natural capital means nature's assets, including trees, oceans and soil. Pollination Group "is now seeking to take the ideas and the investment theses and deals that we have been seeing for many years and scale them up and really kind of turbocharge the focus on natural capital investments," Morton, who was a senior director for energy and climate under President Obama, told CNBC.
The partnership announcement comes as socially responsible investing continues to grow in importance, while attracting a record amount of capital. In the public market sustainable-focused funds saw inflows of $71.1 billion during the second quarter, pushing global assets under management in sustainable funds above $1 trillion for the first time, according to data from Morningstar.
According to a 2018 report from the World Wildlife Fund, nature accounts for at least $125 trillion annually in global economic activity. More and more companies and financial institutions are committing to climate goals, but there are limited ways in which to deploy capital. This is the void HSBC Pollination Climate Asset Management hopes to fill.
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