- Temasek commits an initial amount of S$5 billion to establish GenZero, an investment platform company that aims to accelerate decarbonisation, for future generations towards a net zero world
- GenZero will invest globally across three focus areas: technology-based solutions, nature-based solutions, and carbon ecosystem enablers
- GenZero seeks to deliver positive climate impact alongside long-term sustainable financial returns
Singapore, 6 June 2022 - Temasek today announced the launch of GenZero, a wholly-owned investment platform company dedicated to accelerating decarbonisation globally.
The climate crisis is intensifying and 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 decarbonisation 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 scenario1.
GenZero looks to catalyse decarbonisation 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 commercialise and grow, to more mature ones that are ready to scale.
It has three investment focus areas: (i) technology-based solutions that deliver deep decarbonisation impact through climate-driven technologies; (ii) nature-based solutions that help protect and restore our natural ecosystems to generate climate impact while benefiting local communities and biodiversity; (iii) 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.
Commenting on its establishment, Dr Steve Howard, Chief Sustainability Officer, Temasek International, said "GenZero expands Temasek's focus on deploying capital to catalyse solutions for a better world. Achieving net zero globally will require deployment of around US$5 trillion annually by 20302, 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."
GenZero will be managed by a dedicated team of professionals with deep expertise in the investment and sustainability space, led by its CEO-designate, Frederick Teo, who is currently the Managing Director of Sustainable Solutions at Temasek International. Mr Teo has served nearly 12 years in Temasek in leadership positions across a broad range of roles such as sustainability, portfolio management, business continuity and strategic stakeholder engagement. He will fully transition to his role at GenZero on 1 July 2022.
"GenZero is driven by the common purpose to decarbonise for future generations. 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," said Frederick Teo, CEO-designate, GenZero.
Investing ahead in technology-based solutions
While many decarbonisation 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, Utilisation and Sequestration (CCUS), and advanced biofuels such as Sustainable Aviation Fuel (SAF). These opportunities will help deliver fundamental decarbonisation 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 decarbonisation 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.
Originally published in Temasek, 06 JUN 2022
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