Temasek & BlackRock Launch $600M Decarbonization Partnership
BlackRock and Temasek Launch $600 Million Decarbonization Fund
BlackRock, a financial management firm with $9 trillion in assets, is joining forces with Temasek, a Singapore-based investment company managing $313 billion, to support businesses pioneering technologies for a zero-emission economy by 2050.
This collaboration will begin with an initial investment of $600 million through a new venture called Decarbonization Partners.
Fundraising and Goals
The partners intend to attract further investment from those committed to achieving net zero emissions and generating long-term, sustainable financial returns.
Their initial target is to raise $1 billion for the first fund, incorporating contributions from both Temasek and BlackRock.
A Timely Initiative
Announced during Earth Month, this partnership represents one of numerous substantial, multibillion-dollar efforts aimed at mitigating global climate change driven by greenhouse gas emissions.
Temasek has already demonstrated a proactive approach, making significant investments in alternative protein companies like Impossible Foods, and in alternative energy developers such as Eavor, a geothermal technology firm.
Additionally, Temasek committed $500 million to a renewable power developer in India.
Competition in Climate Investment
Other major players are also heavily involved in climate-focused investing.
A coalition of billionaires, spearheaded by Bill Gates, is currently deploying capital through Breakthrough Energy, a multi-faceted initiative encompassing venture capital and other financing mechanisms.
BlackRock’s Vision
Larry Fink, Chairman and CEO of BlackRock, stated, “The world cannot meet its net zero ambitions without transformational innovation.”
He further explained that scaling decarbonization solutions requires substantial, patient capital to support their objectives.
Fink believes this partnership will establish climate solutions as a distinct asset class, offering both essential contributions to global goals and a significant investment opportunity arising from the transition to net zero.
Investment Focus
Companies seeking support from Decarbonization Partners should consider the investment portfolio of Breakthrough Energy.
Both entities share a common interest in novel energy sources, energy distribution technologies, advancements in building and manufacturing, and innovations in material science and processes.
The Scale of the Opportunity
This venture represents a substantial commitment, reflecting the immense scale of the sustainability challenge and the potential for financial gains from its resolution.
A Morgan Stanley report, as highlighted by Forbes in 2019, estimated the cost of addressing climate change to be $50 trillion.
Temasek’s Commitment
Dilhan Pillay, CEO of Temasek International, emphasized the need for “bold, aggressive actions” to realize global net zero ambitions.
He stated that Decarbonization Partners is one step in Temasek’s commitment to reduce portfolio emissions by 50% by 2030, ultimately achieving net zero emissions by 2050.
Pillay concluded by expressing confidence that collaborative efforts will generate sustainable value for stakeholders and provide investors with opportunities to support scalable climate solutions.
