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ESG

TPG's Rise Fund invests in renewable natural gas marketer Element

NEW YORK (Reuters) - The impact investing arm of TPG has bought a majority stake in Element Markets, which helps corporations achieve sustainability goals through securing renewable natural gas and advising them on credits and offsetting emissions.

No financial details were disclosed in a joint statement by Element Markets and The Rise Fund, which was founded in 2016 by the San Francisco-based private equity firm and counts U2 front man Bono among its backers.

Either through their own actions or under pressure from investors and activist groups, corporations are becoming increasingly attuned to environmental, social and governance (ESG) concerns, and are changing their behaviors accordingly, such as getting power from clean energy sources.

Element Markets is among the leading North American providers of renewable natural gas, also known as biomethane, for use instead of fossil fuels in transportation fleets.

The Houston-based firm also helps clients achieve compliance with environmental standards, through securing carbon and emissions credits.

“Our clients are doing this because of the sustainability stewardship within their corporations,” Element Markets Chief Executive Angela Schwarz told Reuters, noting such commitments are substantial and time-consuming investments for companies.

Element Markets counts Smithfield Foods, the world’s largest pork processor, global cosmetic brand L’Oreal SA, and U.S. utility Dominion Energy Inc among its clients.

Schwarz said the Rise Fund investment will support Element Markets’ expansion plans in the United States and overseas, as well as building out its carbon market operations and those in emerging alternative fuels such as hydrogen.

Both Schwarz and founder Randall Lack will retain a stake in Element Markets following the deal.

“We reached a point where we recognized that sustainability investing and decarbonization is at a major inflection point. So we realized, from a company perspective, that we had to find a partner to help us go to the next level,” said Schwarz.

Reporting by David French in New York; editing by Richard Pullin and Steve Orlofsky

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