The fund has a hard cap of $12.5 billion. A traditional first and second close, with additional capital from Brookfield's institutional investors, is expected to occur over the balance of 2021.

"As the world increasingly focuses on sustainability, the required capital and investable opportunities are expanding faster than originally expected, creating an even greater opportunity for large-scale investments that address climate change and generate attractive returns," Mark Carney, Brookfield vice chair and head of transition said in a prepared statement. 

The fund's focus on net zero aligns with the commercial real estate sector's increasing focus on ESG. 

Over the last decade, commercial real estate players have increasingly considered the environment and sustainability when underwriting investments and operating properties, but the pandemic has catalyzed rapid growth in ESG adoption. In 2020, public funds, private equity firms, high net worth investors and nonprofit companies aggressively increased ESG commitments, and many are acknowledging the critical role that ESG practices will play in the future of real estate investment.

The pandemic pushed ESG policy and practices into the spotlight. According to research from JLL, mutual funds and EFTs invested $288 billion globally in sustainable assets from January through November 2020, a 96% increase over 2019. The UN also noted that corporate net-zero pledges increased three-fold year-over-year.

"We have absolutely seen an increase in commitments over the course of 2020. The number of corporations that committed to science-based-targets, for example, equaled the previous five years combined and the fund flows into US ESG funds, according to Morningstar eclipsed $50 billion, up from $21 billion in 2019," says Lori Mabardi, senior director of ESGR research at JLL. "The global conversation around the need and urgency to shift from a shareholder economy to a stakeholder economy has been underway for some years but reached a new apex in 2020."