Blackstone, the world’s largest alternative investment firm, has announced the launch of a new sustainable resources platform. The initiative will create new channels for loans and investments into companies driving the energy transition.
Blackstone predicts the platform could help it reach $100 billion of investments in climate-change solutions projects over the next decade.
In a statement on the company’s website, Jon Gray, President and COO of Blackstone, said: “The launch of this platform demonstrates our conviction in the investment opportunities presented by the energy transition. Companies globally are shifting to meet this demand. We believe private capital is essential to supporting decarbonization goals and our scale allows us to play a major role.”
Blackstone has already deployed $15 billion of capital in environmentally friendly investments since 2019, according to the company’s website. It will now accelerate its efforts with a dedicated team of 30 investment professionals, driven by the firm’s experience in supporting ESG projects.
The ambitious target comes as an indication that investments in the green transition will become increasingly profitable. A fund started by Bill Gates recently announced its intention to invest $1 billion into climate change technology in Europe. Elsewhere, the CEO of the world’s largest asset management fund Blackrock said ESG was a prerequisite to delivering value and growth.
A smaller investable universe could be seen as a limitation for ESG-compatible investments. But growing demand for solutions to global warming has led securities with a sustainability premium to outperform the market. Last year, half of the largest sustainable investment exchange-traded funds did better than the S&P 500.
Meanwhile, demand for climate change solutions is only set to increase. The International Renewable Energy Agency estimates that decarbonising the global economy will require $100 trillion of investment by 2050. And the more big investors like Blackstone throw their proverbial hats into the decarbonisation ring, the more profitable ESG investing will become.
