BlackRock and Singaporean sovereign wealth fund Temasek are establishing a partnership to invest in private companies that provide solutions and technologies which will reduce and potentially eliminate carbon emissions, according to a joint announcement.
Dubbed “Decarbonisation Partners”, the partnership will launch a series of late stage venture capital and early growth private equity investment funds that will focus on accelerating decarbonisation.
BlackRock and Temasek said they intended to commit a combined $600m (€503m) in initial capital to invest in funds launched by the partnership. They said the funds would also raise third-party capital from investors “committed to achieving a net-zero world while also seeking to obtain long-term sustainable financial returns”.
The partnership has a fundraising target of $1bn for its first fund, including capital from BlackRock and Temasek. The funds will be staffed by employees from both firms, as well as a dedicated team recruited to source and carry out investments and manage the portfolio.
Possible deployment targets include emerging fuel sources, battery storage, and electric and autonomous vehicle technologies. Investment in building and manufacturing sectors is also envisaged.
“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”
Larry Fink, chair and CEO of BlackRock
“The world cannot meet its net zero ambitions without transformational innovation,” said Larry Fink, chair and CEO of BlackRock. “For decarbonisation 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.
He added: “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.”
Dilhan Pillay, CEO of Temasek International, said the partnership was one of several steps the sovereign wealth fund was taking to follow through on its commitment to halving greenhouse gas emissions from its portfolio by 2030, ultimately moving to net-zero emissions by 2050.
“Bold, aggressive actions are needed to make the global net zero ambition a reality,” he said.
Last year BlackRock announced it would be placing sustainability at the centre of its investment approach. Since then, it has set out how it intends to help investors prepare for a net-zero world, following this up by incorporating climate change mitigation into its capital market assumptions and signing up to the Net Zero Asset Managers initiative commitment.