Microsoft and CalSTRS Invest $175 Million in Innovative Natural Climate Solutions with Just Climate – A Game Changer for ESG Initiatives

Just Climate, an investment company focused on climate solutions, has successfully raised $175 million for its Natural Climate Solutions strategy. This initiative aims to invest in companies that focus on transforming land use to achieve net-zero emissions while ensuring profitable returns.

Notable investors include the California State Teachers’ Retirement System (CalSTRS) and Microsoft’s Climate Innovation Fund. Founded in 2021 by Generation Investment Management, Just Climate is led by former U.S. Vice President Al Gore. The company emphasizes impactful investments in sectors with the highest emissions, seeking to radically cut or eliminate these emissions and provide strong financial returns.

Launched in September 2023, the Natural Climate Solutions strategy, directed by Co-Chief Investment Officer Eduardo Mufarej, aims to support entrepreneurs with growth capital. The focus is on innovative practices in agriculture, promoting biological fertilizers and eco-friendly pest control instead of harmful chemicals. The strategy also includes funding restoration projects and developing technologies to validate results in carbon capture and biodiversity.

Just Climate’s team has expanded to 12 investment professionals with offices in London, San Francisco, and São Paulo. In an exciting development, the firm recently announced its first investment by leading a $25 million Series B capital raise for NatureMetrics, a company specializing in biodiversity measurement. This investment is seen as a crucial step in strengthening the natural climate solution sector.

Mufarej expresses optimism about the potential for significant changes in land use, saying, “We believe a rapid land transition, with the potential to be as profound as the energy transition, is coming.” This transformation could reshape food systems and spark growth in ecosystem restoration.

In addition, Microsoft and CalSTRS are also supporting Just Climate’s broader $1.5 billion Industrial Climate Solutions strategy. Microsoft plays a key role, not only as an anchor investor but also as a founding member of the Just Climate Nature Alliance—a coalition of corporate leaders committed to enhancing investments in natural climate solutions.

Erika Basham, Director at Microsoft’s Climate Innovation Fund, highlights the significance of this partnership, stating, “Our work with Just Climate reflects our commitment to advancing nature-based solutions that drive high-integrity carbon removals, build resilient supply chains, and protect biodiversity.”

Investing in natural climate solutions is gaining traction. According to a 2022 report by the Global Landscape Forum, investments in nature-based solutions could provide over $30 trillion in economic opportunities globally by 2030. These strategies not only help combat climate change but also foster biodiversity and sustainable development. As awareness grows, more investors are likely to contribute, amplifying the impact across various sectors.

As we look to the future, Just Climate and similar initiatives could play a pivotal role in creating a sustainable economic model that balances environmental health and financial success.

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