Thought to be the first of its kind, the move will enable the coalition to make short-term cash-like investments without contributing to fossil fuel expansion within capital debt markets.
The nomination of Amundi Investment Solutions ends a 21-month search for an asset management partner who could deliver a fossil-free cash solution.
The University of Edinburgh is part of the 80-strong coalition of universities, colleges and other educational institutions, which is led by the Banking Engagement Forum based at the University of Cambridge.
It offers coordinated approach for the institutions to come together and align financial decisions and use their combined influence to help mitigate climate change.
Sustainable investment
The extraction and burning of fossil fuels is a major cause of climate change, with banking playing a significant role in directly or indirectly financing fossil fuel production.
The fund will accelerate efforts by channelling money into energy transition away from fossil fuels, particularly in areas where finance is a key constraint for growth, such as in low-income countries.
The group intends to collectively invest £500 million in the new fund, which is expected to launch later this year.
Climate targets
The University has set itself ambitious targets to address climate change and become carbon neutral by 2040.
In 2021, the University completed its divestment from fossil fuels, removing direct and pooled investments in companies involved in the extraction and production of fossil fuels.
Other areas of work include the scaling of renewable energy generation on campus and the creation of a sustainable travel policy.
Elsewhere, a large-scale project to capture and store carbon dioxide emissions through the planting of trees and restoration of peatlands is one of the initiatives the University is investing in to jointly tackle the climate and biodiversity crises.