London-based Clean Growth Fund just secured £49 million in the first round of fundraising for its second fund, targeting a total of £150 million. What makes this round stand out is who’s leading the charge: local government pension funds from Strathclyde, Islington, and East Riding.
Pension funds haven’t traditionally been known for taking big risks, especially when it comes to early-stage startups and emerging technology. But these pension schemes are now putting their weight behind companies working on bold new solutions to tackle climate change, signalling a shift in how long-term investors are thinking about climate and returns.
“Raising capital in this market isn’t easy, especially with global political uncertainty affecting climate policy momentum. Despite this, the UK continues to stand out as a hub for climate innovation, and the strong first close of Fund II reflects the trust our investors place in our team and our mission,” said Beverley Gower-Jones, Managing Partner at Clean Growth Fund.
Clean Growth Fund’s track record and ambition
Clean Growth Fund has been backing some of the UK’s most promising climate startups since launching in 2020. Their first fund put money into 19 companies aimed at cutting more than 55 million tonnes of CO₂ by 2030. Companies like Sunswap, developing zero-emission refrigeration for transport, and Rendesco, which focuses on decarbonising industrial heat, show the kind of real-world impact they’re helping to create.
This new fund will continue to invest in seed to early growth-stage companies, with investments ranging from £1 million to £5 million, supporting startups tackling power, transport, buildings, industry, agriculture, and the circular economy. Beverley Gower-Jones OBE, the fund’s managing partner, has a clear vision for positioning the UK as a global hub for climate innovation.
A new force in climate tech funding
The participation of local government pension schemes in Clean Growth Fund II offers stability and mainstream validation for the UK’s climate tech startup ecosystem at a stage frequently difficult to finance.
“Clean Growth Fund’s combination of rigorous investment discipline, clear climate impact and a strong focus on delivering commercial returns made our decision to reinvest straightforward. The UK needs mission-driven, sector experts like CGF to lead in net zero delivery,” said Ian Jamison, Investment Manager, Strathclyde Pension Fund.
It’s a quiet but powerful change, showing that some of the most stable money in finance is now fueling the fast-moving world of climate tech and helping shape a greener future.
