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Laxman Pai, Opalesque Asia:

Research shows a burgeoning "green rush" within the investment world, noting an unprecedented surge in climate funds across both private and public sectors.

The climate funds have boomed in the last four years in both private and public capital, said the study by MSCI.

There are now more than 1,300 funds globally with assets under management (AUM) of over USD 500 billion. Over 70% of public climate funds in the market were launched between 2020 and Q3 2023, representing almost 80% of AUM.

In private markets, there was a total of 173 private-capital funds with climate-related names, accounting for a cumulative capitalization of about USD 90.5 billion, as of Q3 2023 and before COP28.

The climate funds that were launched between 2020 and Q3 2023 alone outweighed funds launched in the previous nine years combined, representing nearly 73% of the USD 90.5 billion cumulative capitalization and about 43% of the total count.

As of Q3 2023, about 64% of the aggregate net asset value (NAV) across private climate funds had exposure to the sub-industries best positioned to benefit from the net-zero transition, in what are otherwise carbon-intensive sectors - utilities and industrials.

According to the study, infrastructure funds accounted for the largest portion of private climate funds, representing nearly half the cumulative capitalization and about one-quarter of the count, as of Q3 2023.

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