By Lauren Juliff,
Head of Investor Relations and Sustainability
The Mansion House Accord has compelled UK pension funds to consider greater exposure to private assets, encouraging funds to diversify their portfolios, align pension outcomes with members’ long-term goals and support UK economic growth1. This is a step in the direction of large asset owners in the US, Australia and Canada, where pension funds generally hold greater allocations to private markets, including well established venture capital (VC) portfolios2,3,4.
When these VC exposures are directed towards innovative climate technology businesses – enabling the development of key technologies that corporates require to decarbonise their value chains – they can help fulfil another, broader goal for pension funds in managing sustainability risks across their total portfolios.
Mandatory TCFD aligned reporting has led to a focus on portfolio transition alignment, with investors requiring forward-looking metrics and largely opting for SBTi (Science Based Targets initiative) exposure5 as the ‘gold standard’ for science based corporate target setting6. Over 10,000 companies worldwide have now had their targets validated by SBTi, meaning they have followed a robust methodology to develop a decarbonisation plan for their businesses. This is important to investors in the world’s largest listed companies, who want to ensure they are prepared for a low carbon future and have actively engaged investee companies to secure those science-based commitments7. But setting the target is only the first step – having publicly demonstrated their intention to take science-based climate action, company execs in a broad range of sectors need to look across their value chains for opportunities to decarbonise. The pathway to energy decarbonisation is now well established and there are a variety of opportunities for companies to quickly reduce their energy emissions. However, there are many parts of corporate value chains that will require the development of new technologies and solutions before SBTis can be achieved.
The UK government published its Modern Industrial Strategy in June 2025, outlining its plan to “increase business investment and grow the industries of the future in the UK 8” with a strong focus on driving clean economy growth. There is a once in a generation opportunity for UK investors to take part in the clean industrial revolution, driving growth and creating new, local, green jobs and industries. In doing so, investors can simultaneously incubate the solutions required for their big, listed asset exposures to decarbonise their value chains and meet their portfolio climate transition targets.
SUNSWAP: Case Study 1 – Clean Transport Refrigeration for Tesco
Tesco Plc is one of the UK’s largest companies and, as a constituent of both the FTSE 100 and MSCI World Indices, holds a strong position in the portfolios of most institutional investors around the world. The second largest investor in Tesco Plc is Norges Bank Investment Management (NBIM)9, which is renowned for its active approach to engagement on sustainability related issues, particularly climate change, and reports regular engagement with Tesco on net zero10.
Tesco has an SBTi validated commitment to reach net-zero GHG emissions across the value chain by 2050, with near term targets to reach 1.5C aligned scope 1 and scope 2 emissions reductions of 82.6% in the next 6 years.
A key barrier to Tesco achieving these goals was transport refrigeration, required for Tesco’s “demanding delivery requirements across multiple temperature zones”11. This requirement has previously been managed by diesel engines, which are reliable but incompatible with Tesco’s sustainability objectives.
In 2020, Sunswap was founded by experts with backgrounds in refrigeration, automotive engineering and clean tech to develop an innovative solution that would decarbonise the global cold chain. In March 2022, Clean Growth Fund invested in a Series A funding round allowing Sunswap to take their first prototype forward to customer trials. Sunswap went on to prove their zero-emission, fully integrated battery and solar-powered transport refrigeration solution can deliver high performance, reliability, and data to optimise fleet operations. In August 2024, Clean Growth Fund followed up with a Series B investment, helping Sunswap accelerate production capacity, technology development and expansion across the UK and Europe.
Following a successful trial with Sunswap in 2023, Tesco deployed zero-emission, triple temperature capability refrigeration units into its operational fleet in 2025. This commitment from Tesco, made possible by CGF incubation of Sunswap’s business, has demonstrated that zero emission cold chain operations are now operationally viable at scale.
This is an example of how UK pensions can invest in direct industry impact – and an illustration of how VC funding can help the world’s largest companies deliver on their emissions reduction targets.
CLEAN FOOD GROUP: Case Study 2 – Cleaning up the food value chain
The food and beverage industry is facing huge disruption in the transition to a net zero aligned economy. Forest, Land and Agriculture (FLAG) emissions account for almost a quarter of all global emissions12, meaning there are significant risks and opportunities for companies in that sector. SBTi has specific guidance for land-intensive sectors, helping companies to understand their risk exposures and set FLAG targets to both reduce emissions and enhance carbon sinks13.
The FLAG targets from SBTi require companies to commit to zero-deforestation aligned with the Accountability Framework initiative (AFi) by 202514. In practice this alignment means that, as of December 2025, nearly all products in a company’s supply chain must have been sourced from land that was not deforested after a stated cutoff date (recommended as 2020). Companies using palm oil, soy, cocoa, timber and beef within their value chains are most exposed, as they are the most problematic commodities for deforestation.
Palm oil is widely used in confectionary products due to its stability, versatility and cost-effectiveness compared to more premium ingredients like cocoa butter. It acts as a preservative and delivers on the required textures for chocolate and creamy or chewy fillings in biscuits and bars. However, the expansion of palm oil production has driven deforestation, biodiversity and habitat loss and been linked with serious human rights violations.
Despite many large global food and beverage companies committing to SBTis, including AFi aligned FLAG targets, a lack of cost-competitive, functional palm oil alternatives has left them falling behind the target date in 2025. Product innovation is required to solve this value chain problem and deliver sustainable, cost-competitive alternatives to palm oil.
Clean Food Group is pioneering the commercial-scale production of microbial oils. They have developed sustainable innovative products that could revolutionise the food, cosmetics and pet food industries15. CLEANOil 40 was created for application in confectionary, chocolate spreads and cream fillings. It mirrors the fatty acid profile of functional palm oil blends matching their texture and consistency while crucially delivering on sustainability, cost and security of supply issues with the use of palm oil.
Clean Growth Fund first invested in Clean Food Group in March 2024. Since then the company has: received regulatory approval for the use of its production-ready CleanOil 25 product in cosmetics; developed exciting partnerships with FMCGs and food manufacturers to further develop product application; and acquired a one million litre fermentation facility in Knowsley which, when operational this year, will make them the largest manufacturer globally for yeast-derived oils and fats. Clean Growth Fund has since followed up with another round of funding, enabling the company to commercialise its innovative products. They have secured an agreement with a large, SBTi target validated, food and beverage manufacturer to develop a higher melting point oil, CLEANFat 60, extending their product portfolio. This has been co-developed as a cocoa butter alternative which at scale has the potential to solve their value chain sustainability, security and cost issues.
This offers multifaceted benefits for institutional investors – an investment in Clean Food Group, via Clean Growth Fund can:
- Help global food, beverage and cosmetics manufacturers deliver on their science-based targets.
- Subvert thousands of hectares of tropical rainforest deforestation associated with the production of palm oil and cocoa.
- Contribute to place-based impact, bringing up to 150 new jobs to the Northwest of England and support the growth of the UK clean industrial revolution.
- https://www.macfarlanes.com/insights/102loh5/the-mansion-house-accord-and-its-impact-on-private-capital-markets/
- https://www.pensionsforpurpose.com/assets/uploads/2025-10-01-ImpactLens-EWVC-Venture-Capital-v5.pdf
- https://pe-insights.com/canadas-pension-giant-to-double-private-equity-exposure-by-2030/
- https://www.privateequityinternational.com/aussupers-charalambous
- https://www.thepensionsregulator.gov.uk/en/document-library/research-and-analysis/review-of-climate-related-disclosures-year-2#metrics
- https://sciencebasedtargets.org/about-us
- https://shareaction.org/investor-initiatives/investor-decarbonisation-initiative
- https://www.gov.uk/government/collections/the-uks-modern-industrial-strategy-2025
- https://markets.ft.com/data/equities/tearsheet/profile?s=TSCO:LSE
- https://www.nbim.no/en/responsible-investment/engaging-with-companies/annual-overview-of-company-dialogues/
- https://sunswap.co.uk/case-studies/tesco
- https://www.ipcc.ch/report/ar6/wg3/downloads/report/IPCC_AR6_WGIII_Chapter02.pdf
- https://sciencebasedtargets.org/sectors/forest-land-and-agriculture
- https://sciencebasedtargets.org/blog/why-no-deforestation-must-be-a-priority-sbtis-flag-guidance-unpacked
- https://cleanfood.group/products
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