Real estate technology-focused venture capital firm Fifth Wall announced today the $500 million close of its inaugural Climate Fund, aimed at investing in solutions to decarbonize the global real estate industry. Target areas for investment for the fund include software, hardware, renewable energy, energy storage, smart buildings, and carbon sequestration technologies.
Buildings and real estate are among the most significant contributors to the global climate challenge, accounting for approximately 40% of carbon emissions, according to the International Energy Agency and UN Environment Programme. They are also among the hardest sources of emissions to replace, given their long-term nature.
Despite the industry’s significant climate impact and the challenges in addressing it, Fifth Wall noted that the sector is only at the early stages of investing in decarbonization solutions.
Brendan Wallace, Fifth Wall Co-Founder and Managing Partner, said:
“Although the real estate industry has historically been among the largest contributors to global greenhouse gases, most real estate organizations have underinvested into the critical climate tech necessary to decarbonize. The strategic LPs in our Climate Fund have instead taken a true leadership role among the industry by making real financial commitments to address real estate’s contributions to climate change.”
The climate fund has received commitments from a wide range of investors, including real estate owners and operators, and financial markets participants. LPs in the fund include American Homes 4 Rent, BBVA, British Land, Camden Property Trust, CBRE, Cosan, The Durst Organization, Equity Residential, Hilton, Host Hotels & Resorts, Hudson Pacific Properties, Invitation Homes, Ivanhoé Cambridge, Kimco Realty Corporation, Lineage Ventures, MGM Resorts, NZ Super Fund, Osgoode Properties, and UDR.
Greg Smithies, Fifth Wall Partner and Co-Lead of the Climate Investment team, said:
“Real estate organizations that prioritize R&D investment, like those invested in Fifth Wall’s Climate Fund, have developed a real competitive edge over their peers. We’re proud to partner with the industry’s leading owners and operators who understand the correlation between an unyielding commitment to climate innovation and an ample balance sheet.”