In the public markets, investors are throwing money at companies like Tesla and others that have positive environmental, social and governance models. However, there is not enough of a pipeline of climate-focused businesses ready to go public, Mr. Paulson said: “We need more high-quality investment opportunities from private equity investments that have the potential to become scalable public companies.”

Mr. Paulson, together with Mr. Coulter, plans on building a broad-based investing platform — and, perhaps uniquely, to make investments in climate that are as profitable as any other kind of investment.

Many other climate funds have a philanthropic stance or are willing to accept lower returns, “but the market will not scale for concessionary or subsidized returns,” he said.