World Fund Explained: Guide for Australian Investors 2025

The World Fund is gaining traction among climate-focused investors, but what does it really mean for Australians in 2025? With global capital increasingly flowing into sustainability, understanding the World Fund’s approach, risks, and rewards is crucial for anyone looking to future-proof their portfolio.

What Is the World Fund?

The World Fund is a leading European climate tech investment fund, known for backing startups and scale-ups with the potential to reduce greenhouse gas emissions at gigaton scale. While it’s headquartered in Berlin, its reach and influence are global—including growing interest among Australian institutional and retail investors.

• Launched: 2021, with a target of €350 million (AUD $570m) for its first fund
• Focus: Climate tech—energy, food, agriculture, manufacturing, buildings, and mobility
• Notable Backers: European Investment Fund, PwC, Ecosia, and several family offices

Unlike many ESG funds, the World Fund invests exclusively in companies with measurable climate impact, using a science-based investment framework called the Climate Performance Potential (CPP) assessment. This means only businesses that can prove their solutions will significantly cut emissions make the grade.

Why Does the World Fund Matter for Australians?

Australia’s appetite for sustainable investing has surged. According to the Responsible Investment Association Australasia, responsible investments accounted for over 40% of Australia’s managed assets by the end of 2024. With new government policies and a greater focus on net zero, international climate funds like the World Fund offer fresh diversification opportunities.

• Access to global innovation: The World Fund invests in climate solutions often unavailable on the ASX, like advanced battery tech or regenerative agriculture platforms.
• Alignment with policy shifts: In 2025, the Australian government continues to strengthen climate disclosure rules and incentivise green investment through superannuation frameworks and tax credits.
• Enhanced due diligence: The World Fund’s strict CPP assessment means its portfolio companies are likely to be ahead of regulatory curves, reducing long-term risk for investors.

For example, an Australian self-managed super fund (SMSF) wanting exposure to global decarbonisation themes could consider allocating a portion to funds-of-funds or ETFs that track international climate leaders—including World Fund portfolio holdings.

What Are the Risks and Considerations?

No investment is risk-free, and the World Fund is no exception. Climate tech is inherently high-risk and high-reward. Here’s what Australian investors should weigh:

• Liquidity: As a venture capital fund, World Fund investments are illiquid, often locked up for 7-10 years.
• Currency exposure: The fund is euro-denominated, exposing Australians to EUR/AUD exchange rate swings.
• Access limitations: Direct investment is typically restricted to institutional investors, but retail access may be available via managed funds or ETFs with World Fund exposure.
• Performance uncertainty: While the fund’s climate impact is clear, financial returns depend on successful exits—never a guarantee in emerging tech sectors.

Despite these challenges, the World Fund’s approach aligns with the growing trend of “impact alpha”—delivering both financial and environmental returns. In 2025, this dual mandate is increasingly attractive to Australian investors facing a rapidly evolving regulatory and climate landscape.

Looking Ahead: The World Fund and the Future of Australian Portfolios

The World Fund exemplifies the next generation of climate investing—science-led, outcome-driven, and global in scope. As Australian policymakers tighten climate rules and investors demand more impact, expect to see more partnerships and co-investments between local super funds and international leaders like the World Fund.

Whether you’re an individual looking to green your super or an adviser seeking global diversification, understanding funds like the World Fund is essential in 2025 and beyond.