Thematic Capital

KIRKBI continued expanding its focus on Thematic Capital in 2022, highlighted with the first investments in Land Sustainability

KIRKBI’s thematic investments are driven by the owner family’s commitment to contribute to a sustainable development in the world. To maximise impact while ensuring long-term return on investment, KIRKBI focuses on four investment themes: Energy Transition, Circular Plastics, Land Sustainability, and Building Billund.

The approach is twofold: KIRKBI invests in companies with more mature technologies, where exercise of active ownership can strengthen their performance and support them reach their full potential. At the same time, KIRKBI explores new technologies that have moved beyond the prototype phase and require risk-willing and longterm capital to reach scale.

During 2022, the building of capabilities to execute and accelerate Thematic Capital investments further advanced and experienced colleagues are now employed in all four investment categories.

Energy Transition

KIRKBI supports the LEGO Group in leveraging its climate ambitions and so far, investments have mainly been within renewable energy, where wind and solar technologies are at a mature level. However, decarbonisation of the energy systems will also require additional initiatives such as zero emission production and new technologies for storing the energy.

Over the coming years, KIRKBI intends to expand the portfolio with new energy storage technologies, which are currently on emerging stages and lack risk-willing capital to mature.

The portfolio of investments within Energy Transition comprises the following:

• 25 % of the Burbo Bank Extension offshore wind farm with a total capacity of 258 MW, located off the coast of Liverpool, UK.

• Ownership of the solar energy developer Adapture Renewables Inc., specialised in developing, engineering, building, and operating distributed utility-scale solar photovoltaic (PV) projects in North America. During 2022, investments were made to expand the organisation and the solar power capacity through new solar parks. The company operates more than 30 solar power projects in 19 states across the USA and has a solid pipeline of development projects to be executed over the coming years. Since KIRKBI acquired the company in 2019, the operating solar portfolio capacity has grown from 70 MW to more than 260 MW by year-end 2022.

• Copenhagen Infrastructure Partners (CIP) Energy Transition Fund I which is focused on investments in next generation renewables energy infrastructure, including carbon capture and energy storage technologies. One of the first projects is Höst, constructing Europe’s largest Power-to-X-facility located on the Danish west coast.

• Minority share of Monolith, a US-based developer of hydrogen and clean materials technologies.

In 2022, KIRKBI divested its share in the Borkum Riffgrund 1 offshore wind farm after 10 years of partial ownership. The proceeds from the offshore wind farm divestment are planned to be invested in new renewable energy capacity.

Circular Plastics

Plastic plays an important role in society due to its qualities, but is also a significant problem given it is based on fossil fuels emitting greenhouse gases and not yet subject to good circular solutions. Consequently, plastic pollution has become a fundamental threat to our planet and health.

With the investment within Circular Plastics, KIRKBI wishes to contribute to converting the plastics economy from the existing linear ‘takemake-waste’ model to a circular one, where plastics are sustainable and continue to be a resource. Circular Plastics is a relatively new thematic investment area in KIRKBI where focus is on supporting the transition towards a world where plastics never become waste and CO 2e emissions are reduced. Investments are made across the plastics value chain within alternative feedstock, plastics prevention, reduction and reuse, sorting, recycling, leakage prevention, and enabling digital technologies.

The portfolio of investments within Circular Plastics comprises the following:

• 10 % of the plastic recycling company Quantafuel, listed on the Oslo Stock Exchange. The company upgrades plastic waste to highquality synthetic fuels (recycled carbon fuels) or chemical feedstock (naphtha) for new plastic production.

• 7 % of Ambercycle – a US-based materials science company building circularity in the fashion industry to reduce plastic waste from textiles.

The investment focus is continuously being refined to provide the highest impact per invested amount.

Land Sustainability

Continued world population growth and increased demand for food and materials are increasing the risk of further deforestation, depletion of ecosystems, and increased carbon emissions. KIRKBI wishes to invest in carbon positive production alternatives, initially by establishing new production forests in combination with areas to increase biodiversity.

Production forestry allows for continued carbon sequestration and storage. By using the wood, e.g. in building materials and furniture, the sequestered CO2 will be stored long-term and replace more CO2 heavy alternatives.

KIRKBI continues building capabilities within this new area under Thematic Capital.

During 2022, 900 hectares of land in Jutland, Denmark, were acquired with the intent to start planting trees in the spring of 2023. Furthermore, a solid pipeline has been established to further expand and create a positive impact on environment, climate, and biodiversity.

How we drive impact towards a more sustainable world

Building Billund

Billund is the founding place of the LEGO Group and KIRKBI remains dedicated to the local community by actively supporting the development of the town.

The Billund City Vision – a plan initiated by KIRKBI, Realdania, and Billund Municipality in 2015 –provides a framework for supporting and further building Billund’s unique character as the Capital of Children. For KIRKBI, the vision also serves as a frame for how we can support this development through Real Estate and other activities.

In April 2022, LEGO® Campus, a state-of-the-art campus at the LEGO Group’s headquarter in Billund, was inaugurated. The property comprises 54,000 sqm and contains 1,800 workstations for employees.

In the city centre of Billund, the construction of Butikstorvet was completed in 2022. Butikstorvet is an urban space for shops, workplaces, and everyday living, and comprises 5,200 sqm of retail and office space, as well as 30 apartments.

The City Vision also includes the development of a new, sustainable town district (Travbyen) focused on play, learning, creativity, and sustainability. In 2022, the existing structures of the ground were demolished, and interim facilities were established to accommodate activities such as play zones and communal gardens. Also, an architectural competition was launched to design the future district, which includes an ambition to achieve sustainable buildings with a strict target of maximum 8 kg CO2 emission per sqm/year, which is below current requirements. KIRKBI will continue to work on the plan for the entire area in collaboration with the local citizens.