KEY POINTS

  • Private group backed by investment firm BlackRock will provide the first $100 million to act as a safety net to absorb potential losses
  • France, Germany, and other foundations will invest additional $77.5 million to help encourage further investments with goal of raising $500 million for the Climate Finance Partnership
  • The fund was announced at the 2020 World Economic Forum in Davos, Switzerland, where climate change has been a central focus

Investment firm BlackRock has teamed with a private group to raise over $500 million to invest in emerging markets and infrastructures aimed at combating climate change through the Climate Finance Partnership.

The group of investors will provide the first $100 million to act as the initial safety net and absorb the initial losses the group or BlackRock could suffer. BlackRock will then use the safety net to help raise the additional $400 million it is seeking through additional institutional investors, which could include additional investment firms, credit companies, banks, and hedge funds.

All this would go to the Climate Finance Partnership, which was established by Germany, France, and the Hewlett and Grantham charitable foundations to push back against climate change. The fund would go towards renewable energy grids and electric transportation in areas of the globe including Southeast Asia, Africa, Latin America, and other areas hit hard by climate change.

The move by BlackRock, one of the world’s biggest asset management companies, is part of a larger shift by the company to respond to climate change. To do so, it has been looking to invest in more funds and efforts attempting to address climate change across the world.

Along with the BlackRock-backed group, France and Germany will both invest $30 million to the fund. The William and Flora Hewlett Foundation also announced it would pledge $10 million, along with another $7.5 million from the Jeremy and Hannelore Grantham Environmental Trust.

The new fund was first announced at the 2020 World Economic Forum in Davos, Switzerland.

Climate change was a focus of the event Tuesday, with Great Thunberg addressing the forum in a speech. During the speech, she called for an end to fossil fuel investments and continued to challenge governments and the private sector to do something about the “problem.”

“In general, the science and the voice of the young people is not at the center of the conversation, and it needs to be,” she said during the forum. “Because this is about us and our future, and future generations, and of course those who are already being affected today.”