Partners Group signs carbon removal deal with Climeworks

Partners Group, a global private markets firm, has signed a 13-year agreement with Climeworks, a Swiss provider of high-quality carbon dioxide removal via direct air capture (DAC). Under the agreement, Climeworks will remove more than 7,000 metric tons of carbon dioxide from the atmosphere on Partners Group’s behalf, which will be permanently stored underground.

An image of Climeworks’ Orca DAC facility and storage installation in Iceland

The agreement represents Partners Group’s first use of a technological solution to help meet its net zero commitments. The group had announced in 2022 that it would develop a decarbonisation program to achieve net zero corporate greenhouse gas emissions from 2030.

“The agreement with Climeworks reflects Partners Group’s focus on sustainability and its commitment to achieving positive stakeholder impact over the long term,” said David Layton, partner & CEO, Partners Group. “Our aim is to be a sustainability leader in private markets by driving forward positive change at the companies under our stewardship, and also by playing a leading corporate role in the transition to a net zero global economy.”

While a priority of the program will be to reduce the firm’s overall emissions, removing residual emissions via capture and storage of atmospheric CO2 will also play a role in achieving the net zero goal. The agreement with Climeworks sits alongside the firm’s growing portfolio of nature-based solutions, such as reforestation, which also contribute to enhancing biodiversity.

Partners Group co-led a CHF 600 million fundraising round in Climeworks in 2022 on behalf of its clients. As it does with all portfolio companies, the firm is currently working with the Climeworks management team and other investors with a focus on addressing the massive scale-up the industry requires.

“High-quality carbon removal must be scaled to gigaton level by 2050, and multi-year agreements like this one are a crucial lever,” said Christoph Gebald, co-founder & Co-CEO,  Climworks. “Partners Group’s commitment to high-quality carbon removals underlines the leading role of the financial services industry in this scale-up and sends a strong signal, which will hopefully inspire more companies to take action on carbon removal.”

Climeworks’ DAC technology actively removes CO2 from the atmosphere in a scalable manner, and it can then be permanently stored underground. In Iceland, where Climeworks operates the world’s largest DAC facility and storage installation in operation, called Orca, its air-captured CO2 is mixed with water and pumped underground, where, through the Carbfix method, it reacts with basaltic rock formations and mineralises.

Through this accelerated natural process, the CO2 turns into stone and is permanently removed from the air for thousands of years. This full DAC and storage process is third-party verified by an independent quality and assurance leader. In 2022, Climeworks broke ground on a second, larger plant in Iceland called Mammoth.