Prudential invests up to £263m in climate transition as framework launched

The London-listed insurance giant said it is particularly focused on looking at emerging markets in relation to climate investments.

Prudential has launched a framework for climate transition funding (Tim Ireland/PA) (PA Archive)

Prudential has launched a framework for climate transition funding and committed to up to 350 million US dollars (£263 million) of investments.

The London-listed insurance giant said it is particularly focused on looking at emerging markets in relation to financing related to the climate transition.

We use this opportunity to influence industry, peers and investee companies to consider the role that emerging markets must play in the global energy transition

Ben Bulmer, chief financial officer of Prudential

The company told shareholders on Monday that it had now set up a framework to address particular challenges related to these investments.

It will seek to address issues related to financing “high carbon to low carbon” projects and the lack of a standardised definition for these.

Prudential said the framework will also help address a need for flexibility linked to emerging markets in Asia and Africa.

On Monday, Prudential confirmed that it will invest 200 million dollars (£150 million) as a founding investor in Brookfield’s Catalytic Transition Fund, their first dedicated fund for transition investing in emerging markets.

It also said it is committing up to 150 million dollars (£113 million) to a climate-focused strategy managed by global investment firm KKR, which seeks to make infrastructure equity investments in Asia focused on the energy transition.

If we're going to leave our children a liveable and prosperous world, the global transition needs to be credible, ambitious, and rapid

Sean Kidney, Climate Bonds Initiative

Ben Bulmer, chief financial officer of Prudential, said: “Our responsible investment strategy leverages our unique position as a large asset owner in Asia and Africa.

“Our presence in emerging markets in these regions gives us a unique voice on responsible investment.

“We use this opportunity to influence industry, peers and investee companies to consider the role that emerging markets must play in the global energy transition.”

Sean Kidney, chief executive officer and founder of the Climate Bonds Initiative, said: “If we’re going to leave our children a liveable and prosperous world, the global transition needs to be credible, ambitious, and rapid.

“By using clear robust investment frameworks and guidance like this, asset owners and asset managers can play a significant role in aligning economies with net zero pathways and avoid portfolio risks like emissions lock-ins, while growing and thriving in a net zero economy.”