A fintech building an artificial intelligence platform for sustainable investment in the debt capital markets has launched.

ClimateAligned, a London-based start-up founded by a Finnish duo, said the product will enable institutional investors to find new opportunities that accelerate finance aligned with climate and emission targets while avoiding greenwashing risks.

More specifically, it is using machine learning 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”.

According to ClimateAligned, the technology and its application can be “infinitely” adapted to assess financial assets against proprietary or regulatory frameworks, guidelines and other metrics with changeable parameters.

“The universe of debt investment, particularly the growing market for thematic and sustainable debt is ripe for AI applications,” said Aleksi Tukiainen, co-founder and chief executive officer of ClimateAligned.

“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.”

More than 13,000 green and sustainable labelled (GSST) bonds totalling $4.6trn have been issued since the market began, with the labelled market now making up approximately 3% of the global debt universe and growing.

S&P Global estimates $900bn to $1trn of GSST issuance in 2023, and in the medium term the Climate Bonds Initiative (CBI) estimates $5trn in annual GSST debt issuance by the end of 2025.

ClimateAligned has raised £1.5m of funding from venture capital investors including Pale blue dot and Frontline Ventures, and strategic angel investors.

Aleksi Tukiainen is an entrepreneur and engineer with previous experience developing start-ups in climate, finance and biotech. Co-founder Krista Tukiainen is former head of market intelligence at the CBI, responsible for CBI’s thematic bonds classification, data systems and taxonomy development. She is currently a member of the LSEG Sustainable Bond Market Advisory Group and a senior adviser to the CBI.

After working with industry stakeholders, including investors, to develop early versions of its platform ClimateAligned is now inviting financial institutions more widely to join its testing programme.

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