BlackRock President and CEO Laurence D. Fink attends a session at the annual meeting of the World Economic Forum (WEF) in Davos on January 23, 2020.
Singapore State Investor Temasek Holdings and Asset Manager BlackRock join forces to invest in private companies that use technology to reduce carbon emissions, the companies said Tuesday.
The partnership, known as Decarbonization Partners, will launch a series of late-stage venture capital and early-growth private equity mutual funds, the two companies said in a statement.
Temasek and BlackRock plan to commit a combined seed capital of $ 600 million to invest in the funds, which would also raise money from third-party investors. The first fund has a $ 1 billion target and will include capital from both companies.
“The world cannot meet its net zero ambitions without transformative innovation,” said Larry Fink, BlackRock president and CEO, in a joint statement.
“For decarbonization technologies and solutions to transform our economy, they must be scaled up,” said Fink. “To do that, they need patient, well-managed capital to support their life goals.”
He said the partnership will help define climate solutions as a separate asset class that is essential to the collective mission of the two companies, as well as “a historic investment opportunity created by the net zero transition.”
BlackRock, the world’s largest money manager, is pushing companies to reveal how they will survive in a world of net zero greenhouse gas emissions.
In his annual letter to CEOs this year, Fink said better sustainability disclosure is in the best interest of companies and investors.
Temasek, one of the world’s leading investors, has committed to halving its portfolio emissions by 2030. It plans to finally go to net zero by 2050.
“Bold and aggressive action is needed to realize global net zero ambition,” said Dilhan Pillay, CEO of Temasek International. “Through collective efforts with like-minded partners, we will be able to create
sustainable value for all of our stakeholders in the long term, and investors will have the opportunity to help deliver innovative solutions at scale to address climate challenges. “
Decarbonization Partners funds will invest in early-stage growth companies in areas such as electric and autonomous vehicle technologies, battery storage, grid solutions, and emerging fuel sources.
The funds will be made up of employees from Temasek and BlackRock, as well as a professional team hired to obtain and make investments and manage the portfolio.