investment viewpoints

Investing in the transition to net zero

Christopher Kaminker, PhD - Head of Sustainable Investment Research & Strategy

Christopher Kaminker, PhD

Head of Sustainable Investment Research & Strategy
Kristina Church - Senior Investment Strategist for sustainable investment

Kristina Church

Senior Investment Strategist for sustainable investment

At Lombard Odier, we believe the climate transition will continue to accelerate in a post-COVID-19 world, powered by a positive feedback loop of economic and market forces. In our view, this transition is already one of the most important drivers of risk and return.

 

Watch the following video for more about investing in the climate transition

To achieve the goals of the Paris agreement, we need to reduce carbon emissions by 50% by 2030 and to net-zero by 2050. The transition is already underway and is creating a USD5.5 trn investment opportunity annually.

In February 2020, we launched our pioneering climate transition strategy, which captures opportunities across all sectors. We believe the transition to net zero will affect every single sector, creating significant growth opportunities and competitive advantages for some companies over others. Companies that provide solutions for carbon reduction will benefit, but so will the transition leaders in some carbon-intensive industries.

Carbon emissions are hardest to abate in sectors like transport, power generation, steel and cement. But these industries are still vital to economic growth in a net-zero economy. Companies that are leaders in the race to decarbonise will increase their market share and grow revenues.

Adapting to a warmer planet also creates opportunities for companies that build resilience. Physical manifestations of a warming planet such as wildfires, drought and flooding, will continue to accelerate even in a best-case scenario. Companies that increase our resilience to climate change by strengthening infrastructure, monitoring risks, or spreading the burden of these risks, should benefit from significant growth opportunities. This will ultimately benefit investors.

important information.

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