M&G plc’s impact investing unit responsAbility Investments announced today that it has raised over $200 million for its climate investment strategy for Asia at the fund’s second closing, including a $100 million investment from M&G’s Life business.

Launched in November 2023, the climate strategy aims to contribute to CO2 reduction in Asia through targeted investments in low-emission technologies, addressing an urgent need for investment in climate-friendly solutions and infrastructure in Asia. The fund’s first close included investments from Germany’s development bank KfW and the Dutch development bank FMO.

Ciaran Mulligan, CIO of Investment Management and Oversight of the Prudential With-Profits Fund at M&G, said::

“We are pleased to be investing in responsAbility’s climate investment strategy for Asia. Investing in emerging markets is crucial and this substantial allocation reflects our commitment to fostering sustainable development and economic growth in regions that are most vulnerable to the impacts of climate change.”

respsonsAbility’s Asia climate strategy uses a blended finance structure, combining public funding with private capital. Blended finance brings together public capital and private funding through a common investment structure, enabling investors to invest in certain types of investments that have high perceived risk profiles, such as new climate mitigation-related technologies. The instruments are designed to attract large-scale institutional capital, allowing public financiers to use a small amount of their own resources as a first loss to mobilize large amount of private capital to reach large number of underlying climate projects needed.

The strategy focuses on sectors with high CO2 savings potential in Asia, including renewable energy, battery energy storage, electric mobility, energy efficiency and circular economy. According to responsAbility, the firm aims to raise $500 million through the strategy, and to achieve approximately 16 million tons of direct CO2 savings over the lifetime of the investments.

Stephanie Bilo, Chief Client & Investment Solutions Officer at responsAbility, said:

“Achieving the energy transition requires substantial financial commitment. While governments cannot provide all needed funds, the private sector has the potential to fill the gap. Our focus is on creating investment opportunities that attract private capital to support decarbonization.”