Singapore state investor Temasek said Monday it has commited an initial amount of S$5 billion ($3.64 billion) to establish GenZero, an investment platform company that aims to accelerate decarbonisation, for future generations towards a net zero world.

Temasek said in a statement that GenZero looks to catalyse decarbonisation solutions with its ability to deploy long-term and flexible capital, and 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.

The firm has three investment focus areas: technology-based solutions that deliver deep decarbonisation 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.

“GenZero expands Temasek’s focus on deploying capital to catalyse solutions for a better world. Achieving net zero globally will require deployment of around $5 trillion 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,” said Dr Steve Howard, Chief Sustainability Officer of Temasek International.

According to the statement, GenZero will be managed by a dedicated team of professionals with deep expertise in the investment and sustainability space, led by its Chief Executive Officer-designate, Frederick Teo, who is currently the Managing Director of Sustainable Solutions at Temasek International.

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 July 1 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 Teo.

GenZero said it 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.

The firm has invested in Newlight, a United States-based manufacturer of biomaterial produced from methane to displace plastics. Through a joint investment with C-Quest Capital, it 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.

GenZero will also support and scale the deployment of nature-based solutions through investments and project co-development with partners in forestry and agriculture sectors, and leverage carbon credits as a market mechanism to accelerate funding into these solutions.

The firm has partnered with Global EverGreening Alliance to support farming communities in Kenya to improve their livelihoods through land restoration and tree planting. It has also invested in the New Forests Tropical Asia Forest Fund 2, which aims to develop a diversified portfolio of sustainable forest plantation assets in Southeast Asia and support the region’s transition towards responsible forestry management.

To build an effective and credible carbon ecosystem, GenZero will also invest in carbon ecosystem enablers including areas such as climate advisory services, carbon trading infrastructure, monitoring, reporting and 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 organisations around the world. It 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, it has made an investment in Perennial, a United States-based early-stage start-up using artificial intelligence and remote sensing to accurately quantify soil organic carbon sequestration on agricultural lands.

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