Jean Rogers, once described as a “rock star”, joined Blackstone as global head of ESG one year ago. She spoke to New Private Markets to discuss her priorities and ambitions in the role.
Rogers was founder and the 11-year chief executive of the Sustainability Accounting Standards Board, one of the most established and widely used ESG frameworks for financial institutions. At Blackstone, she sits at the top of a 35-person ESG team that includes regional and asset class-specific ESG heads. Her appointment capped off an ESG hiring spree last year.
1. Will Blackstone set a net-zero target?
“We are focused on near-term decarbonisation,” says Rogers. “There’s so much emphasis on scopes 1, 2 and 3 and a company’s numbers today for diversity and carbon footprint. But what is much more important is the rate of decarbonisation, what drives the reduction in carbon and how economically they’re doing it.”
Blackstone announced a plan in 2020 to reduce carbon emissions by an average of 15 percent within the first three years of ownership for new investments from 2021 “where we control energy usage”. The 15 percent target for new investments “means we can act during the lifetime we own assets to build more resilient businesses by helping put them on a solid, science-informed trajectory now, rather than waiting to take action until later down the line.”
The firm measures the rate of decarbonisation – the reduction in carbon footprint over time – for portfolio companies participating in the 15 percent target program, a spokesperson for Blackstone told New Private Markets.
2. Will Blackstone divest from fossil fuel-related assets?
“We are focused on decarbonisation” across its entire portfolio, “not divestment”, says Rogers. Since her appointment, Blackstone has committed not to make new investments in oil and gas exploration and production from its future private equity and debt energy funds, as New Private Markets reported earlier this year. But that commitment does not apply to Blackstone’s $4.2 billion third Energy Partners fund, which closed at $4.2 billion last year and has a strategy that includes upstream oil and gas as well as renewables and clean energy technologies.
Blackstone has not ruled out midstream and downstream fossil fuel-related investments. Natural gas pipelines and storage facilities are “critical to ensuring continued access to affordable and reliable energy”, Rogers tells New Private Markets. Moreover, such assets can offer transition-friendly capabilities such as “carbon capture and transportation, renewable fuels and the development of decarbonised hydrogen”, says Rogers. Citing research from the International Energy Agency, Rogers continues: “In the medium term, natural gas is seen as playing a major role in supporting a transition to net zero.”
3. Does Blackstone plan to revive its impact strategy?
In 2019, Blackstone started work and hired some execs to launch an impact investment strategy. It sat within Blackstone’s “Strategic Partners” secondaries group but was positioned to pursue opportunities across private equity, infrastructure and real estate. Tanya Barnes, previously a managing director in Goldman Sachs’ merchant banking division, was recruited to head up the platform. Barnes left Blackstone in 2021 to co-lead JPMorgan Chase’s climate fund, New Private Markets previously reported.
A source with knowledge of the situation confirmed to New Private Markets that Blackstone had wrapped up its nascent impact platform. Rogers declines to comment on it, but says: “Our strategies are distinct at Blackstone. We have a strategy focused on decarbonisation and strategies focused on diversity. They’re very different. There are very intentional programmes to design and deliver specific outcomes, whether it’s better companies or reducing risk.”
This article has been updated to clarify that Blackstone’s commitment not to invest in oil and gas exploration applies to its future energy funds only. It has also been amended to include additional comment from Blackstone on its measurement of decarbonisation rates.