A new research institute to investigate how businesses can help the country move to a low carbon economy was launched today by Lord Stern, the author of the government's influential report on climate change.

Philanthropists Jeremy and Hannelore Grantham founded the Grantham Research Institute on Climate Change and the Environment at the London School of Economics with a donation of £12m from their charitable foundation. The institute will also receive £3m funding from insurance firm Munich Re.

Lord Stern said he hoped the work of the institute would influence public policy ahead of next year's Copenhagen round of international talks to agree a successor to the Kyoto Agreement.

"This is a creative example of the type of partnerships between charitable foundations, public money, the private sector and universities which reflects the kind of collaboration the world will need on climate change," he said.

Tackling climate change is also a central strategy for Munich Re, said chief executive Nikolaus von Bomhard.

"We have to master the risk side," he said. "At the same time, we see opportunities for us in addressing the substantial demand for insurance-based solutions stemming from the very different strategies necessary to mitigate and adapt to climate change and the ensuing challenges."

Speaking to The Guardian ahead of the launch, Lord Stern said that far from dampening interest in climate change, the meltdown on the world's financial markets could serve to drive greater interest in low carbon technologies and business models.

He argued that while there was a risk, some political and business leaders would divert all their attention to tackling economic issues, the increase in international co-operation the crisis has fostered, the financial incentive for firms to embrace energy efficiency, and the fact that investments in low carbon infrastructure could be used to boost an ailing economy meant some long term benefits are likely to emerge from the crisis.

"We're going to have to grow out of this… and [cleantech] is an area which looks as though it could well grow strongly and with the right support, could be one of the major engines of growth," he said.

The institute will examine five key areas of research: international co-operation, carbon markets, technology support, biofuels, and regional case studies.