ImpactAlpha, October 27 – Saudi Arabia’s state-owned oil company Aramco announced a $1.5 billion venture fund to invest in in carbon capture and storage, low-carbon fuels and other technologies that can support the company’s 2050 net-zero goals.
The Sustainability Fund announcement was made at the kingdom’s Future Investment Initiative, an impact summit once known as “Davos in the Desert.”
“The company is harnessing innovation and collaboration as it seeks long-term solutions to global energy challenges,” said Aramco’s Yasir Al-Rumayyan, who also chairs the organization hosting the Future Investment Initiative. At the same time, Al-Rumayyan made clear the company sees a long-term role for fossil fuels.
Aramco last year raked in nearly $110 billion in oil sales.
The oil giant’s venture arm, Aramco Ventures, will manage the fund, one of the largest climate-focused venture funds, particularly from an oil company.
Oil production
The launch of the energy transition fund comes as Saudi Arabia, the world’s largest oil exporter, anticipates reduced oil demand as the world economy slows. The kingdom led the decision by OPEC Plus to cut oil production next month in a bid to drive up oil prices, despite pleas from U.S. President Biden to increase supply. The move angered the U.S. government, which said it would benefit Russia’s oil export-dependent economy and harm American consumers.
Impact sheen
Aramco was also a participant in Saudi Arabia’s first carbon credit auction this week from a new regional voluntary carbon market organized by the kingdom’s $620 billion sovereign wealth fund, Public Investment Fund, and the Saudi Tadawul Group. Despite glaring ESG risks, Saudi Arabia “has remained a magnet for some ESG and impact investors,” observed ImpactAlpha’s Imogen Rose-Smith following last year’s Future Investment Initiative.
This year’s gathering drew business leaders including JPMorgan Chase’s Jamie Dimon, Goldman Sach’s David Solomon, and Blackstone’s Steve Schwarzman.
