Temasek Launches Investment Platform Aimed at Accelerating Decarbonization

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Temasek today announced the launch of GenZero, a wholly-owned investment platform company dedicated to accelerating decarbonization globally.

The latest report by the Intergovernmental Panel on Climate Change has warned that the world is not on track to limit global temperature rise to 1.5 degrees Celsius above pre-industrial levels. There is an urgent need to accelerate decarbonization across all sectors to avoid irreversible damage to the planet by reducing global carbon emissions and address the emissions gap, which is estimated between 19 and 26 gigatonnes of carbon in 2030 for a 1.5 degrees Celsius scenario.

GenZero looks to catalyze decarbonization solutions with its ability to deploy long-term and flexible capital. It invests in opportunities ranging from early-stage companies and solutions that require patient capital to commercialize and grow, to more mature ones that are ready to scale.

It has three investment focus areas:

• Technology-based solutions that deliver deep decarbonization impact through climate-driven technologies;
• Nature-based solutions that help protect and restore our natural ecosystems to generate climate impact while benefiting local communities and biodiversity;
• Carbon ecosystem enablers which refer to companies and solutions that support the development of an effective, efficient, and credible carbon ecosystem.

Together, these focus areas present a holistic and integrated approach to address the emissions gap, with solutions across both the near- and longer-term horizons. GenZero seeks to deliver positive climate impact alongside long-term sustainable financial returns

Investing ahead in technology-based solutions 

While many decarbonization technologies and innovations currently exist, they require capital to further advance commercial viability and deployment to scale. GenZero will invest in carbon reduction and carbon removal technologies such as low-carbon materials, Carbon Capture, Utilization and Sequestration (CCUS), and advanced biofuels such as Sustainable Aviation Fuel (SAF). These opportunities will help deliver fundamental decarbonization impact in sectors such as power and energy, transport and building, industry and manufacturing.

GenZero has invested in Newlight, a US-based manufacturer of biomaterial produced from methane to displace plastics. Through a joint investment with C-Quest Capital, GenZero is funding deployment of clean, energy efficient cookstoves to rural households in Southeast Asia to reduce carbon emissions. GenZero will also invest with third-party funds to expand its networks and collaborate with like-minded partners. It is currently working with Decarbonization Partners, a Temasek-BlackRock partnership launching a series of funds that focus on late-stage venture capital and early growth private equity decarbonization solutions investments; and Brookfield Global Transition Fund, which aims to accelerate the global transition to a net zero carbon economy by targeting investment opportunities relating to reducing emissions and energy consumption, as well as increasing low-carbon energy capacity and supporting sustainable solutions.

Building an effective and credible carbon ecosystem

GenZero will invest in carbon ecosystem enablers including areas such as climate advisory services, carbon trading infrastructure, Monitoring, Reporting & Verification (MRV) technologies and rating providers.

GenZero has invested in global climate solutions firm South Pole, which develops and implements emission reduction projects and strategies for companies, governments, and organizations around the world. GenZero is also working with Climate Impact X, a global carbon marketplace and exchange, which aims to establish a credible carbon trading infrastructure based in Asia. In addition, GenZero has made an investment in Perennial, a US-based early-stage start-up using artificial intelligence and remote sensing to accurately quantify soil organic carbon sequestration on agricultural lands.