The NZ Super Fund has committed US$100m to a fund that will invest in companies developing products and solutions for climate change mitigation and adaptation.

Wellington Management’s Climate Innovation Fund I (“CIF”) seeks to generate non-concessionary venture capital/growth returns by investing in Series B and C rounds of financing at the time of initial investment, predominately across North America and Europe. Target sectors 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 manager of the NZ Super Fund, said CIF’s dual focus on financial returns and positive environmental impacts matched the NZ Super Fund’s own sustainable investment philosophy and objectives.

“Wellington’s research-led investment process, including its partnerships with the likes of Woodwell Climate Research Center and the Joint Program on the Science and Policy of Global Change at the Massachusetts Institute of Technology also aligns with our approach,” said Ms Hart.

Ms Hart said the NZ Super Fund’s involvement with CIF could potentially expand to include co-investments in successful portfolio companies.

The NZ Super Fund’s investment in CIF follows similar investments in the Fifth Wall Climate Technology Fund and Generation Investment Management’s Sustainable Solutions Fund IV.

In June this year, the NZ Super Fund shifted about 40% of its overall investment portfolio to market indices aligned with the Paris Agreement in order to further reduce its portfolio’s carbon footprint and deliver improved ESG outcomes.