The new fund will enable faith-based asset owners to invest in large-scale projects aimed at supporting vulnerable communities with the transition to a low-carbon economy.
The new Multi-Faith Just Transition Fund (MJTF) initiative, launched during the COP27 UN climate change conference last week, was developed by UK-based NGO FaithInvest and the Climate Investment Funds, the world’s biggest multilateral climate fund.
The new fund will be “the first-of-its-kind, globally accessible financing vehicle”, connecting faith-based institutional asset owners with sovereign countries and regional development banks “to finance at-scale, climate-smart investments underpinned by social inclusion and just transition outcomes in primarily emerging and developing economies”, according to both parties.
Faith groups across the world have billions of dollars invested in global stock markets. They range from the Mormon Church in the US (which has assets of $100bn) to the Church of England’s Church Commissioners (£9.2bn in assets) and the Vatican Bank (€5bn in managed assets).
‘Putting their money where their mouths are’
The MJTF is modelled on the $11.1bn Climate Investment Funds (CIF), which was established in 2008 to support low-carbon and climate-resilient development in vulnerable countries.
“To achieve the scale of investments necessary to turn the market towards a sustainable world and away from climate and biodiversity disaster, the faiths have to take up the challenge of putting their money where their mouths are!,” said FaithInvest’s CEO Martin Palmer.
He called the plans for the new fund “a huge step in the right direction”.
The development of a fund that brings faith and secular groups together to mitigate climate change is “much needed”, according to CIF’s CEO Mafalda Duarte. “We really need to mobilise ourselves in new strong, powerful partnerships in developing countries to deliver climate ambition which is closely aligned with development impacts,” she said.
“’The recipe is simple: it’s using some of the capital of faith asset owners, partner that with the kind of capital we’ve been using in developing countries – risk, patient, concessional – and through this partnership target investments in developing countries that bring about development, climate and just transition outcomes,” Duarte said.
The new fund forms part of a new Multi-faith/Multi-sector Alliance for Climate Action, which was also announced at COP27.
Members of this group include the ACT Alliance, the Brookings Institution, the Climate Justice Institute, FaithInvest, the Global Energy Alliance for People and Planet, GreenFaith, the Mary Robinson Foundation, Partnership for Faith and Development, Religions for Peace, the Rockefeller Foundation and UNEP’s Faith for Earth.