Al Gore Venture Gets Investment From Calstrs, Microsoft

(Bloomberg) -- A venture started by Al Gore’s Generation Investment Management has raised $175 million to invest in businesses that enable the restoration of land degraded by agriculture and deforestation.

The money will support the natural climate solutions strategy of Generation’s Just Climate, with Microsoft Corp.’s Climate Innovation Fund and the California State Teachers’ Retirement System joining as anchor investors, according to a statement on Tuesday. As a result, the investment manager now oversees $1.8 billion of assets, a total that also includes a fund targeting decarbonization of heavy industry.

“The concept of the energy transition is a mainstream concept,” said Clara Barby, senior partner at Just Climate. “When you do the work on the science and the data and where the emissions are coming from, it becomes very clear that the land transition is going to be the next wave.” 

Barby describes the potential to cut emissions in farmed and deforested land as both “huge” and “addressable.” Harmful agricultural practices, such as overuse of chemical pesticides, forest destruction and food systems, are a major contributor to global warming and responsible for as much as a third of the world’s greenhouse gas emissions. Restoring damaged ecosystems and rethinking the production of food is therefore a key part of tackling the climate crisis.

“The way we are practicing land management today has to change in the same way as the way that we’re burning fossil fuels today has to change,” said Barby. Both “are unsustainable,” she said.

After making its first natural-climate solutions investment earlier this year — in a UK startup that helps clients measure their impact on nature — Just Climate is now exploring a pipeline of deals covering everything from biological fertilizers to technologies for regenerative agriculture and waste-to-energy projects, said co-Chief Investment Officer Eduardo Mufarej.

Four sectors are being targeted: food value chains, forest and ecosystem restoration, waste and water, and enabling technologies, Mufarej said in an interview. The goal is to make “catalytic” investments by avoiding well-trodden assets like renewables in Europe, he said.

In practice, that means the firm is looking at everything from biological fertilizers to technologies for regenerative agriculture and waste-to-energy projects. Other areas of interest include solutions for wildfire management and waste reduction, and technologies that enable monitoring of soil health and biodiversity, as well as those that can be used for tracing cattle grazing, Mufarej said.

Just Climate’s investment committee has discussed more than 20 potential opportunities, he said.

Gore, a staunch advocate for addressing climate change and a former US vice president, founded Generation two decades ago with former Goldman Sachs Group Inc. executive David Blood, and five partners. 

(Adds comment from Just Climate executive in ninth paragraph.)

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