ESG
Apollo's $100B sustainable investing platform looks beyond private equity
February 25, 2022
Apollo Global Management is increasing the firepower behind its decarbonization efforts to the tune of $100 billion.
The asset manager plans to deploy the capital through a new platform devoted to energy transition and the decarbonization of industrial sectors by 2030, highlighting a trend that has become a top priority for firms.
Apollo, which manages nearly $500 billion in assets, unveiled plans for its sustainability platform last week with the expectation that it will shape investments across the entire firm, including credit and real estate deals.
"When you talk about energy transition, it's a theme, not a sector; it permeates so much of what we all do," said Olivia Wassenaar, an Apollo investor who was just promoted to lead the firm's sustainable investing initiative. "So for us, it made sense to come up with a platform approach so that we're thoughtful and coordinated in finding the best source of capital to meet the needs of companies and communities across the globe."
Other top private equity firms have allocated billions of dollars to impact-investing goals as well, in an effort to boost their environmental, social and governance reach.
TPG announced a $5.4 billion first close of its Rise Climate Fund—chaired by Hank Paulson, formerly a Treasury secretary and CEO of Goldman Sachs—this past July. The firm aims to amass at least $7 billion for the vehicle.
Since then, the fund has made a number of moves, including the acquisition of a newly formed decarbonization company and a $500 million stake in Nextracker, a solar-tracking and software solutions company.
In January, Blackstone launched a sustainable resources credit platform, focused on investing in and lending to renewable energy companies and those supporting energy transition.
The Carlyle Group established a sustainable infrastructure platform called "Copia Power" focused on developing, owning and operating environmentally sustainable infrastructure in the US this past July. The firm also announced its commitment to achieve net-zero greenhouse gas emissions by 2050 or sooner across investments.
A rising ESG focus and rapid growth of impact-investing have been at the forefront of private equity strategy over the past couple of years, as highlighted in our analyst report ESG, Impact, and Greenwashing in PE and VC.
Apollo has already put $19 billion to work on its decarbonization strategies over the last five years. It plans to increase that total by $50 billion over the next five years before deploying over $100 billion by 2030.
Apollo listed 57 companies in its ESG Reporting Program worldwide, with a total revenue figure topping $119 billion, according to the firm's ESG report released in August.
The unveiling of Apollo's new platform falls in line with its forward-looking goal of enhanced due diligence, with a deeper focus on sustainability improvements and targets.
"We've got a big deep team who has invested in climate opportunities across our platform," Wassenaar said.
Wassenaar, who previously was co-lead senior partner for natural resources, will be joined by Joseph Moroney as head of sustainable finance. Others on that team include Christine Bave and Dan Vogel. Apollo's broader sustainability strategy will be overseen by Chief Sustainability Officer Dave Stangis.
"It is and will continue to be an integrated, multi-asset approach across everything we do," Wassenaar said. "This is a firm-wide commitment."
Under the plan, Apollo will focus on deals in categories including clean energy generation, electric mobility and infrastructure, and carbon mitigation. However, Wassenar said the firm doesn't have strict priorities when it comes to business sectors or verticals.
"This is an announcement that has been years in the making, in terms of how we think about deploying capital and what we think the opportunity set is going forward," Wassenaar said.
Featured image by Olivier Le Moal/Getty Images
The asset manager plans to deploy the capital through a new platform devoted to energy transition and the decarbonization of industrial sectors by 2030, highlighting a trend that has become a top priority for firms.
Apollo, which manages nearly $500 billion in assets, unveiled plans for its sustainability platform last week with the expectation that it will shape investments across the entire firm, including credit and real estate deals.
"When you talk about energy transition, it's a theme, not a sector; it permeates so much of what we all do," said Olivia Wassenaar, an Apollo investor who was just promoted to lead the firm's sustainable investing initiative. "So for us, it made sense to come up with a platform approach so that we're thoughtful and coordinated in finding the best source of capital to meet the needs of companies and communities across the globe."
Other top private equity firms have allocated billions of dollars to impact-investing goals as well, in an effort to boost their environmental, social and governance reach.
TPG announced a $5.4 billion first close of its Rise Climate Fund—chaired by Hank Paulson, formerly a Treasury secretary and CEO of Goldman Sachs—this past July. The firm aims to amass at least $7 billion for the vehicle.
Since then, the fund has made a number of moves, including the acquisition of a newly formed decarbonization company and a $500 million stake in Nextracker, a solar-tracking and software solutions company.
In January, Blackstone launched a sustainable resources credit platform, focused on investing in and lending to renewable energy companies and those supporting energy transition.
The Carlyle Group established a sustainable infrastructure platform called "Copia Power" focused on developing, owning and operating environmentally sustainable infrastructure in the US this past July. The firm also announced its commitment to achieve net-zero greenhouse gas emissions by 2050 or sooner across investments.
A rising ESG focus and rapid growth of impact-investing have been at the forefront of private equity strategy over the past couple of years, as highlighted in our analyst report ESG, Impact, and Greenwashing in PE and VC.
Apollo has already put $19 billion to work on its decarbonization strategies over the last five years. It plans to increase that total by $50 billion over the next five years before deploying over $100 billion by 2030.
Apollo listed 57 companies in its ESG Reporting Program worldwide, with a total revenue figure topping $119 billion, according to the firm's ESG report released in August.
The unveiling of Apollo's new platform falls in line with its forward-looking goal of enhanced due diligence, with a deeper focus on sustainability improvements and targets.
"We've got a big deep team who has invested in climate opportunities across our platform," Wassenaar said.
Wassenaar, who previously was co-lead senior partner for natural resources, will be joined by Joseph Moroney as head of sustainable finance. Others on that team include Christine Bave and Dan Vogel. Apollo's broader sustainability strategy will be overseen by Chief Sustainability Officer Dave Stangis.
"It is and will continue to be an integrated, multi-asset approach across everything we do," Wassenaar said. "This is a firm-wide commitment."
Under the plan, Apollo will focus on deals in categories including clean energy generation, electric mobility and infrastructure, and carbon mitigation. However, Wassenar said the firm doesn't have strict priorities when it comes to business sectors or verticals.
"This is an announcement that has been years in the making, in terms of how we think about deploying capital and what we think the opportunity set is going forward," Wassenaar said.
Related read: How emerging ESG standards put pressure on PE to adapt
Featured image by Olivier Le Moal/Getty Images
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