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Climate-minded investors who want to bet on the data center boom and accelerate the energy transition have a new tool to evaluate the potential impact of their capital.
The Rhodium Group collaborated with the California pension fund CalSTRS and Generate Capital, a clean energy investor, on a framework that measures the impact of a specific investment on the pace of grid and industrial decarbonization. A high score indicates that an investment catalyzes large greenhouse gas emissions reductions relative to the capital required.
The tool can be applied to investments beyond the power sector, including agriculture and heavy industry. But researchers decided to focus on data centers first because those projects are attracting a lot of capital and some investors — including pension and sovereign wealth funds — want to make sure their money is still driving the biggest climate impact, according to Michael Delgado, a partner at the Rhodium Group.
“We’re increasingly seeing climate-dedicated capital looking at data centers as an opportunity to play in the clean energy space and generate returns for their stakeholders,” Delgado told Latitude Media.
