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Credit Suisse has managed to raise US$318 million for its fund dedicated to tech-forward climate solutions. The successful close of the Climate Innovation Fund, despite a scandal-ridden few months for the Swiss investment bank, is indicative of the strong demand from investors for sustainable finance.
Credit Suisse announced in late May the closing of its Climate Innovation Fund with an impressive US$318 million, which will be allocated to ten venture funds globally that are active in supporting carbon-reduction solutions. These climate tech solutions span across food and agriculture, production and consumption and the mobility and urbanisation sectors, said the Swiss investment bank.
“By partnering with mission-driven venture firms, this fund will empower entrepreneurs to commercialise and grow their radically transformative technology and business ideas in order to contribute to planetary health at scale,” commented head of private equity portfolio solutions Sven-Christian Kindt.
“The investment opportunity lies in the new technologies and business models accelerating the transformation and changes in the way we grow food, produce building materials or scale energy efficient means of transportation,” said Credit Suisse in the announcement.
Credit Suisse’s climate fund will additionally provide investors with reporting on the “degree of alignment” with the United Nations Sustainable Development Goals (SDGs) as part of its framework.
The demand for this fund has been remarkable across the full spectrum of wealth management clients.Fabian Shey, Head of Global Private & Alternative Markets, Credit Suisse
It comes despite the rough waters that the firm has found itself in over the past few months as it suffers from huge losses in the wake of the U.S. hedge fund Archegos Capital’s downfall, as well as the collapse of British supply chain finance company Greensill.
Credit Suisse’s investment banking CEO Brian Chin and risk and compliance chief Lara Warner have both stepped down from their roles since the double-saga, and the bank has announced a major shakeup of its asset management business and suspended bonuses.
Fabian Shey, head of global private and alternative markets at Credit Suisse, reported surging demand for its climate fund, suggesting that the scandals have done little to hamper investor interest in ESG financial products.
The investment opportunity lies in the new technologies and business models accelerating the transformation and changes in the way we grow food, produce building materials or scale energy efficient means of transportation.Credit Suisse
“The demand for this fund has been remarkable across the full spectrum of wealth management clients,” said Shey in a statement. “It is a meaningful step and a substantial amount of capital being invested with purpose towards net zero.”
“I am happy to see how strongly the Climate Innovation Fund resonates with our clients,” added Kindt.
Sustainable products in finance have become a major trend in recent months. Within the first quarter of 2021, inflows into ESG funds rose 19% to a new high of nearly US$2 trillion, according to industry tracker Morningstar data.
However, a report from the Economist suggests that investors must now be wary of rampant greenwashing in the realm of ESG finance, with many of the top ESG funds globally “stuffed full of polluters and sin stocks”.
Lead image courtesy of Credit Suisse.