Following up on its promise to achieve net-zero carbon emissions by 2050, Temasek, the Singaporean state-owned investment vehicle has announced establishing a green investment platform company called GenZero with initial backing of $5B. GenZero seeks to steer future generations toward a net-zero world, accelerating the planet’s decarbonisation alongside delivering long-term sustainable financial returns.
Temasek’s Chief Sustainability Officer Dr Steve Howard further explained GenZero’s establishment, “GenZero expands Temasek’s focus on deploying capital to catalyse solutions for a better world. Achieving net-zero globally will require the deployment of around $5Tn annually by 2030, to rapidly adopt and commercialise sustainable energy solutions. Its flexible approach will enable it to catalyse near and long-term solutions to support ongoing efforts to achieve net-zero globally. GenZero will not only support Temasek’s efforts as we strive towards halving our portfolio’s net emissions by 2030 and working towards a net-zero portfolio by 2050 but also those of the wider ecosystem.”
The will and war chest to catalyse decarbonisation
The $5B backing, as well as the fact that GenZero is beneath the umbrella of an investment vehicle backed by a government and manages over $400B in assets, justifies the ability of the green investor to deploy its capital with a long term outlook. Its investments can also be deployed with flexibility and will likely favour the companies it invests in. The newly formed fund will invest globally across 3 areas of focus: tech-based solutions, nature-based solutions and carbon ecosystem enablers.
GenZero hopes to fund the many existing and non-existent decarbonisation technologies and innovations that currently exist, getting them to scale. Such include carbon reduction & removal technologies such as low-carbon materials, Carbon Capture and advanced biofuels such as Sustainable Aviation Fuel (SAF), just to mention a few.
Nature-based solutions like the protection, restoration and management of natural ecosystems will also be supported by GenZero, enabling their scaled deployment through investments and project co-development with partners in agroforestry. The Singaporean investment body will leverage carbon credits as a market mechanism to accelerate funding for these solutions.
GenZero’s investment in carbon ecosystem enablers will help push for credibility, ensuring an effective and trusted carbon market. Investments furthering this cause will tackle areas such as Monitoring, Reporting & Verification (MRV) technologies, climate advisory services & carbon trading infrastructure, just to mention a few.
A highlight of its already made investments is in Newlight, a US-based manufacturer of biomaterial produced from methane that displaces plastics. By partnering with Global EverGreening Alliance, GreenZero is assisting farming communities in Kenya to improve their livelihoods through land restoration and tree planting. South Pole, a GenZero investee which develops & implements emission reduction projects & strategies for governments and organisations around the world is also a notable mention. GenZero will also invest with third-party funds as seen through its partnership with Decarbonization Partners, a Temasek-BlackRock partnership launching a series of funds that focus on late-stage venture capital and early growth private equity decarbonisation solutions investments.
Steering the investment vehicle
GenZero will be run by a dedicated team of professionals with extensive expertise in the investment and sustainability space, led by its CEO-designate, Frederick Teo, who currently serves as the MD of Sustainable Solutions at Temasek International. Mr Teo has held leadership positions for nearly 12 years in Temasek and will fully transition to his role at GenZero on 1st July 2022.
The fund’s Board of Directors has also been formed and brings together experienced leaders with collective expertise spanning sustainability, energy, finance and technology, as well as nature-related sectors. It’ll be chaired by Mr Sunny Verghese, the co-founder & Group CEO of Olam, who also chaired the World Business Council for Sustainable Development.
“Recognising the importance of immediate action, we will focus on investment opportunities that can deliver positive climate impact by 2030 while ensuring sustainable financial returns. Besides deploying capital, we will work with our investee companies to address operational challenges and accelerate the deployment of their solutions to achieve our shared net-zero target,” explained Frederick Teo, the CEO-designate of GenZero.