Investment management firm Blackstone has launched Blackstone Credit’s Sustainable Resources Platform, which focuses on investing in and lending to renewable energy companies and those supporting the energy transition, the company said on Jan. 21.
The platform will invest across the credit spectrum in investment grade credit, non-investment grade credit, preferred and convertible securities. It will focus on a broad range of sectors, including residential solar and home efficiency; renewable electricity generation and storage; products, services, technologies and natural resources that enable the energy transition; decarbonized transportation; sustainability linked loans; green financings that fund environmental projects; and other energy infrastructure investments.
"The launch of this platform demonstrates our conviction in the investment opportunities presented by the energy transition,” Jon Gray, president and COO of Blackstone, said. “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 Credit is one of the world’s largest providers of private credit in the energy transition marketplace. This initiative brings together Blackstone Credit’s scale and expertise in these areas with the firm’s ESG and Portfolio Operations capabilities to deliver value by providing new solutions and sources of capital to companies driving the broader energy transition. The Sustainable Resources Credit Platform complements the firm’s existing private equity, energy and infrastructure strategies that are investing in companies that support the energy transition and climate change solutions.
Governments and companies around the world are committing to decarbonization at an accelerated pace and over 90% of global emissions are covered by government net zero commitments. An estimated $100 trillion will be required through 2050 to decarbonize the global economy.
As one of the world’s largest sources of private capital, Blackstone has a decade-long history of investing in renewable energy and climate change solutions. Since 2019, Blackstone has committed over $15 billion in investments that the firm believes are consistent with the broader energy transition. Blackstone anticipates that its capital deployment in this space will continue to grow. Across its businesses, Blackstone sees an opportunity to invest an estimated $100 billion in energy transition and climate change solutions projects over the next decade.
Blackstone Credit’s Sustainable Resources Platform is a dedicated credit platform that seeks to address the growing challenges, investment needs and expertise required by this historic transition. It is led by Robert Horn, who has been with Blackstone Credit since its founding, and has been named Global Head of the Sustainable Resources Group for Blackstone Credit. Simon Hayden has joined the firm from EIG, and he is a senior managing director for Blackstone Credit in London and leads the Sustainable Resources activities in Europe.
The Sustainable Resources Platform includes more than 30 investment professionals across North America and Europe, supported by the portfolio operations teams at Blackstone. The platform will also leverage the firm’s considerable ESG expertise, bringing ESG professionals into the investment process. Newly hired Global Head of ESG for Blackstone, Jean Rogers, the founder of the Sustainability Accounting Standards Board (SASB), and Rita Mangalick, head of ESG for Blackstone Credit, will advise investment teams, oversee ESG diligence and support other initiatives for the platform.
“Blackstone Credit’s unmatched scale is being unleashed to support companies that are driving the energy transition,” Dwight Scott, global head of Blackstone Credit, said. “We are excited to launch this dedicated financing platform to build on the over $15 billion that Blackstone has committed since 2019 in investments that we believe are consistent with the broader energy transition.”
Blackstone more broadly has been an active participant in the market with numerous recent debt and equity investments across its businesses, including committing approximately $3 billion in Invenergy Renewables, the largest developer of renewable energy projects in North America, and financing over 350 MW of solar across 18 states through an investment in solar power company Altus Power.
In addition, the firm has invested in ClearGen, a company that provides flexible capital for microgrids and other energy transition solutions for commercial and industrial customers.
Blackstone has also backed Transmission Developers Inc. to develop the Champlain Hudson Power Express, an underground electric transmission line spanning approximately 339 miles between Canada and New York City. The project will deliver 1,250 MW of clean power to New York City, which is still reliant on fossil fuels for approximately 85% of its electricity consumption.
In January 2021, Blackstone revealed its Emissions Reduction Program to reduce carbon emissions by 15% in aggregate over three years for all new assets where the firm controls energy usage.
To accomplish this goal, Blackstone has developed what it believes is a robust decarbonization program designed to increase value by reducing energy use and carbon emissions at scale in a way that is measurable and tangible. Blackstone is also developing a carbon accounting system and a capability to track and report on Scope 1 and Scope 2 emissions reductions. This will allow the firm to measure its impact and provide its investors with critical data to help them to meet their own climate targets and financial goals.