Temasek International (Temasek), an investment company with a net portfolio value of US$214 billion, and BlackRock Inc., one of the largest financial services companies in the United States, announced the establishment of a partnership called Decarbonization Partners. The partnership will launch a series of late-stage venture capital and early growth private equity investment funds that will focus on advancing decarbonization solutions to accelerate global efforts to achieve a net-zero economy by 2050.
BlackRock and Temasek intend to commit a combined US$600 million in initial capital to invest in multiple funds launched by the partnership. The funds will also raise third-party capital from investors who are committed to achieving a net-zero world while also seeking to obtain long-term sustainable financial returns. Decarbonization Partners has a fundraising target of US$1 billion for its first fund, including capital from Temasek and BlackRock.
Temasek and BlackRock share the belief that climate transition presents a significant investment opportunity. The partnership combines both firms’ expertise in private markets to invest in companies and proven technologies that will reduce and potentially eliminate carbon emissions.
“The world cannot meet its net-zero ambitions without transformational innovation,” said Larry Fink, chair and CEO of BlackRock. “For decarbonization solutions and technologies to transform our economy, they need to be scaled. To do that, they need patient, well-managed capital to support their vital goals. This partnership will help define climate solutions as a standalone asset class that is both essential to our collective mission and a historic investment opportunity created by the net-zero transition.”
“Bold, aggressive actions are needed to make the global net-zero ambition a reality,” said Dilhan Pillay, CEO of Temasek. “Decarbonization Partners represents one of several steps we are taking to follow through on our commitment to halve the emissions from our portfolio by 2030, and ultimately move to net-zero emissions by 2050. Through collective efforts with like-minded partners, we will be able to create sustainable value for all of our stakeholders over the long term, and investors will have the opportunity to help deliver innovative solutions at scale to address climate challenges.”
The Decarbonization Partners funds will deploy private capital with a focus on early-stage growth companies targeting proven, next-generation renewable and mobility technology including emerging fuel sources, grid solutions, battery storage, and electric and autonomous vehicle technologies, as well as in building and manufacturing sectors to drive decarbonization, resource efficiencies, and material and process innovation.
The partnership will leverage both firms’ expertise in sourcing and underwriting private investments, portfolio and risk management, and sustainable technology and analytics. The funds will be staffed by employees from both firms, as well as a professional and dedicated team recruited to source and undertake investments and manage its portfolio.