On June 22, Brookfield Asset Management Inc. revealed that it had raised $15 billion for the Brookfield Global Transition Fund (BGTF) that will focus on helping the global economy transition to net zero emissions.
The Brookfield Global Transition Fund And Net Zero
Although it is the largest investor in the fund, it raised the money from over 100 global investors, to facilitate the clean-energy transition. The announcement of the fund comes at a time when financial institutions, especially banks, have come under scrutiny for ignoring their clean energy commitments. Studies have found that banks continue to invest heavily in fossil fuel-based industries that can adversely impact climate change. In such dark times, the Brookfield Energy Transition Fund gives hope to the future of the planet. After all, this is the only home we have.
The Brookfield Global Transition Fund focuses on investments that will accelerate the global transition to a net zero economy while ensuring good returns to investors. According to a written statement issued by the company, they have already deployed $2.5 billion to fund decarbonization technologies in the US, the UK, Germany, and North America.
The main focus of the Brookfield Energy Transition Fund is to aid governments and organizations with their transition to clean energy. For a healthier planet and economy, it is imperative to make the shift to clean energy. The climate-focused fund will also invest in the transformation of carbon-intensive industries. The asset management firm revealed that the Brookfield Global Transition Fund will target “investment opportunities relating to reducing greenhouse gas emissions and energy consumption, as well as increasing low-carbon energy capacity and supporting sustainable solutions.”
Connor Teskey, CEO of Brookfield Renewable, said, “Investor demand for this fund has been exceptionally strong. Our investment partners are looking for an experienced investor who can guide their contribution to what is both a critical requirement and a major global opportunity. Brookfield has been reliably investing in renewable power for decades, and we are uniquely well positioned to be both a capital provider and an operating partner to the world’s major businesses as they accelerate their decarbonization plans.”
The fund is now closed to institutional investors but it will be open to private wealth investors who wish to join the cause. The Brookfield Global Transition Fund was oversubscribed and drew the interest of both private and public pension funds, insurance companies, and family offices, amongst others. The Fund is headed by Mark Carney, former governor of the Bank of England and the Bank of Canada, and Teskey, both of whom are renowned for their environmental commitments and astute business sense.
Brookfield’s Commitment to Clean Energy
Brookfield has time and again reiterated its commitment to the Paris Agreement.
The Paris Agreement committed countries to limiting the global average temperature rise to well below 2 degrees Celsius above pre-industrial levels—with 1.5 degrees as a stretch target. A few years later, world economies mutually agreed that we must limit Earth’s temperature increase to 1.5 degree Celsius. As governments offer subsidies to promote clean energy and reduce greenhouse gas emissions, companies have been investing heavily in technology that will aid their transition to clean energy. This creates massive economic opportunities for investors and developers.
In an emailed statement, Carney wrote “With the global carbon budget being rapidly run down, now is the time for comprehensive, determined action.” Building an economy that is financially secure and centered around clean-energy transition is what the Brookfield Energy Transition Fund will eventually achieve. Brookfield has almost $725 million in assets under its management, out of which $65 billion has been invested in the renewable power business.
