Investcorp to set up ‘multi-billion dollar’ sustainability platform

Reuters/Aditya Kalra

• 10,000 of the world’s largest companies aim for net zero by 2050
• UAE is recognised for its commitment to financing a sustainable future

Investcorp has revealed plans to establish a “multi-billion dollar” sustainability platform to capitalise on what co-CEO Rishi Kapoor described as “the most attractive opportunity from an investment perspective that we have seen in a generation”.

A report from consultants McKinsey estimates $250 trillion of cumulative spending on physical assets is needed over the next three decades in order to meet the Network for Greening the Financial System Net Zero 2050 scenario.

Investcorp, the alternative investments firm based in Bahrain, which managed $50 billion in assets as of December 2022, is set to play a significant part in helping to achieve this target.

• UAE tops international ranking for green finance commitment
• Bahrain’s Investcorp to spend $1bn on real estate across GCC

“I see the sustainability space as being not very different from where software was maybe 20 years ago,” Kapoor said.

“Software was the domain of just a few firms or enterprises and the number of private equity funds targeting investment into software was no more than a handful.

“Now it’s a multi-billion dollar industry because the underlying space grew so rapidly. Climatetech should be a multi-billion platform in the next few years.”

He revealed the global fund would be set up this year as a priority for the firm and would be similar to that launched earlier this month to channel investments into the GCC real estate sector.

Kapoor said that 10,000 of the largest companies in the world have already signed up to a net zero objective by 2050.

At a regional level the GCC countries are playing a significant role. The UAE has set a target of 2050 to reach net zero along with Oman and Israel, while Saudi Arabia and Bahrain have committed to this target by 2060.

Kapoor said that the fight against climate change involves the transition to clean energy, with fossil fuels still making up around 80 percent of the world’s energy mix, coupled with the need to decarbonise key areas including buildings, mobility and agriculture.

“It’s a substantial capital deployment, mainly towards scaling up of technologies that are commercially viable already, but basically need to be rolled out en masse at scale,” he said.

“You are looking at one of the most meaningful flows and demand for innovative technology-enabled solutions that I think the world has ever experienced. Certainly bigger than the industrial revolution.”

The UAE, in particular, is increasingly being recognised for its commitment to financing a green and sustainable future. Last month, as part of the Financial Services: State of the Nation Survey 2022, the emirates recorded the highest scores among several key markets.

Carried out by fintech firm Finastra, the survey found that 99 percent of UAE respondents agreed that financial institutions have a responsibility to support the communities they serve, up from 88 percent last year, while 96 percent stated that ESG (environmental, social, and governance) is important.

The UAE’s appetite for green lending was also the highest, with 94 percent of those surveyed agreeing that it presents an opportunity for growth and revenue generation.