GenZero CEO Frederick Teo says macroeconomic uncertainty could delay returns in the carbon market. (Photo: GenZero)
Singapore-based green investment firm GenZero released its inaugural sustainability report on Sept. 1, revealing that its portfolio has helped abate 3 million tonnes of CO2 equivalent—close to half of its 2028 target.
While the company sees strong potential in Southeast Asia’s carbon credit market, it cautioned that macroeconomic uncertainty could delay carbon-related projects and extend investment return periods.
Controversial cookstove projects excluded from target
Founded in 2022 by Singapore sovereign wealth fund Temasek, GenZero focuses on accelerating decarbonization through nature-based solutions, emerging technologies, and climate services. It was launched with an initial capital commitment of US$5 billion and aims to deliver 7 million tonnes of CO2e reductions by 2028.
Unlike many peers, GenZero sets climate impact targets adjusted to its equity share in each project. Report’s coordinator Sofia Galanek noted that while some investors disclose climate ambitions, few adjust them for ownership share—and even fewer commit to absolute targets.
GenZero’s nature-based investments include Aurora Sustainable Lands, which manages U.S. forests for carbon credits. Beyond that, the firm has also backed Velocys (a UK sustainable aviation fuel producer), Singapore’s carbon marketplace Climate Impact X, and carbon ratings agency BeZero Carbon.
Currently, only direct reduction or removal projects—such as nature restoration—are counted toward its climate targets, while indirect impacts like SAF production are excluded.
The firm also clarified it has excluded U.S.-based C-Quest Capital’s cookstove program from its climate impact accounting, following fraud allegations tied to overstated its environmental benefits. GenZero confirmed it will not reinvest in this project, though it remains open to other cookstove initiatives.
GenZero has excluded the controversial cookstove program from its climate impact accounting, but does not rule out the possibility of investing in similar projects in the future. (Photo: Pixabay)
Southeast Asia’s untapped carbon potential
Kimberly Tan, GenZero’s Managing Director and Head of Investments, emphasized that while carbon methodologies are improving project integrity, revisions can cut issuable credits by up to 50%, complicating investor risk assessments.
Meanwhile, climate-tech financing has slowed: cumulative investments from Q4 2022 to Q3 2023 totaled US$79 billion, compared with US$56 billion over the next four quarters—a 29% decline.
Still, GenZero continues to back transition credits, including a 2024 collaboration with ACEN (Philippines) and Keppel (Singapore) to retire a coal plant in the Philippines ahead of schedule.
Anshari Rahman, Head of Policy and Analytics, stressed Southeast Asia’s underdeveloped carbon potential, said “carbon markets can be leveraged as an accelerator for decarbonisation in South-east Asia and the broader Asian region.”
Looking ahead, GenZero plans to expand into projects that deliver co-benefits beyond emission reductions, including biogas and agroforestry.
CEO Frederick Teo cautioned, however, that in today’s weak and uncertain macroeconomic climate, technology-based carbon removal projects face longer gestation periods and stricter verification processes, which may delay credit issuance and stretch investment return horizons.
Source: The Straits Times, GenZero, Eco-business, Lianhe Zaobao
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