Schroders, BlueOrchard Finance Ltd*, and the Luxembourg Ministry of Finance are launching an impact strategy with the goal of contributing to the transition to carbon-neutral and resilient economies, in addition to achieving sustainable growth in emerging markets.

The initiative will specifically focus on the environment: climate mitigation, climate adaptation, and the protection of water and biodiversity. The partnership is focused in channelling investments from both the public and the private sectors via an innovative Luxembourg-based financing vehicle that will help close the climate finance funding gap.

Global investment manager Schroders and its impact investment specialist BlueOrchard were selected in an international tender process. Schroders will provide the portfolio and risk management services as the AIFM^[1], while BlueOrchard has been appointed as the investment manager for this climate impact strategy. The strategy aims to invest in solutions that address the environmental goals of the Paris Agreement and the United Nations Sustainable Development Goals, among others.

“It is crucial to our common future that we solve the issues of climate change and environmental protection both nationally and internationally. As a leading international financial centre and investment fund hub, Luxembourg is uniquely positioned to mobilise capital to address these urgent issues. With this new partnership, we are strengthening our long-term commitment to blended finance and helping seed a new strategy that supports sustainable investments and contributes to resilient economies in emerging markets,” said Luxembourg Minister of Finance, Yuriko Backes.

“This landmark mandate will help us further accelerate climate and environmental action in markets where we can make the greatest impact. We are proud that the Luxembourg government has recognised our expertise in innovative blended finance strategies. We look forward to advancing climate change mitigation and adaptation with our partners, whose objectives are firmly aligned with our own,” said BlueOrchard’s CEO, Philipp Mueller.

“Schroders in Luxembourg is proud to have been selected as the management company by the Ministry of Finance. Schroders has had a significant and successful presence in Luxembourg for over 30 years, through which we offer a broad range of asset management products and related services. We look forward to working with BlueOrchard and partnering with the Luxembourg government to bring this innovative strategy to the market,” said Finbarr Browne, CEO, Schroder Investment Management (Europe).

There is an urgent need to address climate change and environmental degradation, however, there is continued dependency on public funds for sustainable related investments, in particular in emerging markets. Building on common goals, the Luxembourg Ministry of Finance, Schroders, and BlueOrchard will combine their strengths to address this funding gap with an innovative investment strategy.

*a member of the Schroders Group

^[1] Alternative Investment Fund Manager

Source: Schroders