The BlackRock Temasek Decarbonization Partnership

Decarbonization Partners

BlackRock and Temasek are partnering to establish Decarbonization Partners, which will focus on investments that advance decarbonization solutions. It’s part of our commitment to support the goal of net zero carbon emissions by 2050 and help clients participate in this historic investment opportunity.
BkackRock Temasek

 

Together, BlackRock and Temasek have committed US$600 million to invest in companies and proven technologies that will reduce and potentially eliminate carbon emissions.

Temasek and BlackRock share the belief that climate transition presents a significant investment opportunity. The partnership will seek to make investments in 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.

To achieve the global ambition of keeping global warming to 1.5 degrees, we need to rapidly decarbonize our economies to a point where we’ve got net zero emissions by 2050

BlackRock Bottom Line
Decarbonization and the road to a net zero economy

Teresa O’Flynn
Global Head of Sustainable Investing for BlackRock Alternatives Investors

So if we work back, we need to reduce carbon emissions by about 1.7 billion tons each year between now and 2050.
Source: Breakthroughenergy.org, “Getting to zero: The most ambitious innovation effort in human history,” August 2020 https://www.breakthroughenergy.org/our-challenge/getting-to-zero

To put that figure in context, COVID-19, which saw unprecedented disruption to economic activity and travel, saw carbon emissions fall by about two billion tons in 2020. 

Electrification of our energy systems, digitalization and technological advancement are all at the center of achieving decarbonization.

Decarbonization has three major components. Firstly, using less energy. Energy efficiency of equipment, of buildings, of manufacturing but also affecting the demand side so consuming less. Moving towards the shared economy.

Secondly, supplying the world with clean energy, such as green electricity. Also, the supporting infrastructure and storage capacity that’s necessary to deliver a fossil-free grid. Accelerating new energy sources such as hydrogen but also renewable fuels, particularly for those hard to decarbonize sectors such as aviation.

And finally, actively taking carbon out of the system. And this includes nature-based solutions such as reforestation but also developing the technology that will capture carbon from the atmosphere, store it and possibly utilize it.

Governments play a critical role in setting the right kind of policy and regulatory environment. And we’re also seeing ambition increase in the corporate sector. And so far, over 1,500 companies have set net zero targets. We’ve seen industry get together around the trickier to decarbonize sectors such as heavy industry and manufacturing. 

Bottom Line GFX

The bottom line is that the world is on a massive transformational path propelling us towards a zero-carbon and digital future. We believe that this represents a historic investment opportunity and that investors will be better served by being on the forefront of this transition.

Decarbonization and the road to a net zero economy

The world needs to reduce carbon emissions by approximately 1.7 billion tons each year to achieve net zero by 2050. So what is decarbonization, and how will it impact investors? Teresa O'Flynn, Global Head of Sustainable Investing for BlackRock Alternatives, discusses on this episode of BlackRock Bottom Line.

The partnership intends to 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. In addition to expertise from BlackRock and Temasek, our partnership will convene scientists, technologists, and thought leaders in the sustainability space.

Decarbonization Partners builds on BlackRock’s deep expertise in sustainable investing and is helping to deliver on the net zero commitments we laid out in our 2021 letter to clients, which span measurement and transparency, investment management, and investment stewardship.

Our investment offerings, spanning renewable power to sustainable ETFs, are helping accelerate the transition to net zero. This partnership offers the next step in our offerings. As the world transitions to a net zero economy – seeking ways to accelerate decarbonization – Decarbonization Partners seeks to be at the center of that transformation.