• Clean Growth Fund secured a $30.3 million commitment from Border to Coast, taking Fund II beyond half of its $202 million target.
• Fund II will back 25 early-stage UK climate technology companies while targeting a 20% net internal rate of return.
• The fund’s institutional investors manage about $161 billion in combined assets across 18 UK local government pension schemes.

Pension capital backs UK climate innovation

Clean Growth Fund has raised total commitments for its second climate technology fund to approximately $110 million, strengthening the flow of British pension capital into domestic decarbonisation ventures.

The second close takes Fund II beyond halfway toward its $202 million target. The vehicle invests in UK companies from Seed to Series A whose technologies could reduce emissions and support green economic growth.

It is also designed to deliver commercial performance, with a target net internal rate of return of 20%.

Border to Coast’s UK Opportunities Fund anchored the close with a $30.3 million commitment. Strathclyde Pension Fund added about $13.5 million, bringing its total Fund II allocation to approximately $40.7 million.

Islington Pension Fund and East Riding Pension Fund are also investors. Together, the pool partnership represents 18 Local Government Pension Scheme funds with combined assets of around $161 billion.

Beverley Gower-Jones OBE, Founder and Managing Partner of Clean Growth Fund, says: “Border to Coast joining Fund II takes us past the halfway mark towards our £150 million target. Increasingly, major institutional investors are looking to UK climate tech for exactly what it offers – strong long-term returns alongside real economic growth right across the country. We exist to connect British institutional capital with British innovation – the returns and the impact go hand-in-hand.”

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Fund targets 25 climate technology companies

Founded in 2020, Clean Growth Fund invests in technologies that can materially reduce greenhouse gas emissions or improve resource efficiency. Its mandate covers power, transport, industry, buildings, agrifood and the circular economy.

The manager follows a place-based investment strategy. It invests across established research centres such as Oxford, Cambridge and London, as well as emerging regional technology hubs.

Fund I backed 19 UK startups. The portfolio is projected to abate 27 million metric tons of carbon dioxide equivalent annually by 2030. Clean Growth Fund estimates that this is 1.5 times the carbon absorbed by all UK forests.

Fund II plans to support 25 companies and has already completed four investments. Those businesses are based in Sheffield, Bristol, Cardiff and London. The latest fundraising also follows the manager’s exit from renewable heating business Rendesco in May 2026.

“The UK has the world-class universities, the scientific talent, the regulatory framework, and the policy ambition – and its net zero economy is growing more than three times faster than the economy as a whole. That is the opportunity Border to Coast is moving to capture, ahead of the curve. The more capital that gets behind British innovation, the faster it scales into global winners. This is where the growth is, and I’m confident about how much further we can take it,” adds Beverly.

European climate funds continue raising capital

The transaction forms part of continued fundraising by European climate and sustainability investors. Selected sector-focused fund closes during 2026 have raised approximately $767 million.

Recent vehicles include funds managed by 2150, SlateVC, The Footprint Firm, Climentum Capital, VitaminºC and Ananda Impact Ventures. London-based Eka Ventures has also closed an approximately $106 million impact fund covering sustainability, health and decarbonisation.

For pension fund trustees, the Clean Growth Fund raise illustrates how climate technology is entering institutional portfolios through mandates tied to financial returns, regional development and measurable emissions reductions.

Lorraine Martin, Investment Manager at Strathclyde Pension Fund, says: “We first invested in Clean Growth Fund because it offered a compelling opportunity to deliver strong long-term returns for our members while backing UK innovation. That thesis has materialised, and our increased commitment to Fund II reflects our continued confidence in the team as well as the scale and strength of the opportunity. This is exactly the kind of productive, homegrown investment we believe can deliver for our members over the long term.”

The broader test will be whether this capital can help British climate ventures move beyond early-stage funding and compete globally. Success would strengthen the UK’s industrial base while giving institutional investors greater exposure to the economic transition toward net zero.