New Platform to Scale Sustainable Finance in Debt Capital Markets
ClimateAligned is developing the first AI platform designed to integrate end-to-end sustainability, ESG and climate factors and data applicable to debt investment decisions in a single application.
Its product will enable institutional investors to find new opportunities that accelerate finance aligned with climate and emissions targets - and avoid greenwashing risks.
ClimateAligned is redefining how investors interact with and access decision-useful data on climate: The company uses Machine Learning (ML) technology to gather, process and analyse data from multiple sources, rendering the climate and sustainability credentials of bonds and issuers transparent and comparable, through a single access point.
The technology and its application can be infinitely adapted to assess financial assets against proprietary or regulatory frameworks, guidelines and other metrics at scale with changeable parameters. This enables investors to rapidly integrate best practices in climate and sustainable investing into their credit investment processes, portfolios and products, and avoid greenwashing and associated reputational risks.
The ‘white box’ platform ClimateAligned is building establishes a new level of transparency to sustainable investment, bringing greater efficiency, focus, and clarity for investors. It provides visibility through multiple levels of data discoverability including bond vs issuer-level context and comparisons of promises to actions including:
The ClimateAligned platform harnesses generative AI to meet a crucial need in a market segment that sits at the heart of transition: Bloomberg calculates the size of the global bond market totalled USD$166 trillion in August 2023, of which corporates made up close to half.
More than 13,000 green and sustainable labelled (GSST*) bonds totalling USD$4.6 trillion have been issued since market inception with the labelled market now making up approximately 3% of the global debt universe and growing.
Over 1300 issuers came to market with GSST bonds in 2022, with H1 2023 recording 725. S&P Global estimates $900 billion to $1trillion of GSST issuance in 2023, and in the medium term the Climate Bonds Initiative estimates $5 trillion in annual GSST debt issuance by the end of 2025.
"ClimateAligned sees the financial sector moving towards investing into hard-to-decarbonise sectors and facing the larger opportunities to engage in the Net Zero transition. The universe of debt investment, particularly the growing market for thematic and sustainable debt is ripe for AI applications. Enabling a new wave of climate transition finance, at scale, is what we are looking to achieve for investors, using the technology now available in generative AI and large language models."
“Accelerating investment into multiple climate solutions is amongst the most urgent challenges we all face. We are thrilled to support the founding team behind ClimateAligned on this important journey to develop an AI product that opens new avenues for investors to shift capital to where it is needed most.”
"ClimateAligned is developing a first-of-its-kind, AI-driven technology to tackle the climate investment gap. We believe its product will play a pivotal role in enabling faster and more meaningful green investment and are delighted to back the team on their journey."
"Adoption of AI models to sustainability investment in financial markets can only increase certainty for investors. That’s essential to get the ever-larger capital allocations we need for transition and, increasingly, adaptation. AI will open new paths to identify best practice investments, address risk and embedding of climate and ESG factors at the heart of mainstream investment products. Climate Aligned is an early and welcome driver to this much needed development.”
ClimateAligned is a London based fintech start-up whose Finnish founding team focuses on applying AI solutions to accelerating sustainable investment. ClimateAligned is backed by industry-leading angel investors and venture capitalists including Pale blue dot and Frontline VC. ClimateAligned is supported by an advisory group that includes the founder & CEO of the Climate Bonds Initiative, Sean Kidney. ClimateAligned has worked extensively with industry stakeholders, including investors, NGOs and standard setters to develop early versions of its platform and is now inviting financial institutions globally to join its testing programme.
Institutions are encouraged to apply for access to the Beta version of the platform and the opportunity to shape later versions through their feedback [here](mailto:firstname.lastname@example.org?subject=Reaching out Re ClimateAligned).
Co-Founder and CEO Aleksi Tukiainen is an entrepreneur and engineer with previous experience in developing startups in climate, finance and biotech, with a focus on building and commercialising AI and machine learning solutions in new ventures. He is part of the original founding team of and currently an Advisor to Sylvera and Entrepreneur in Residence to Cambridge Applied Research Ltd.
Co-Founder and CCO Krista Tukiainen is a climate and green finance professional and former Head of Market Intelligence at the Climate Bonds Initiative, responsible for CBI’s thematic bonds classification, data systems and taxonomy development. Previously she has worked as a sustainable debt investment consultant in multiple roles including with ICMA. She is currently a member of the LSEG Sustainable Bond Market Advisory Group and a Senior Adviser to the Climate Bonds Initiative.
More information can be found at the ClimateAligned website.
*Labelled debt products include green, social, sustainability and transition bonds (GSST) and sustainability-linked bonds and loans (SLB & SLL).
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