Investing in the transition to net zero

Investing in the transition to net zero

At Lombard Odier, we believe the climate transition will continue to accelerate in a post-COVID-19 world, presenting a USD5.5 trn investment opportunity annually. Our climate transition strategy captures opportunities across all sectors created by the urgent need to transition to net-zero emissions, and adapt to a warmer climate.

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Could cheap oil and COVID-19 derail the transport revolution? Not in our view.

Could cheap oil and COVID-19 derail the transport revolution? Not in our view.

At LO, we believe supply and demand dynamics across the transport sector have fundamentally changed. Despite the rapid – and likely prolonged - decline in oil prices, we believe the Transport Revolution continues to provide attractive investment opportunities, especially as consumers and governments respond to the heavy economic and social costs of the COVID-19 pandemic.

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Positioning a portfolio for climate transition

Positioning a portfolio for climate transition

The world is already decarbonising, and the transition is accelerating. Some USD 5.5 trillion of investment will be required annually over the next decade to generate sustainable economic growth, and to align with the Paris Agreement. Market forces are now in the driving seat of the transition, which we believe is already one of the most important drivers of risk and return.

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How carbon-intensive industries can be brought into the fight against climate change

How carbon-intensive industries can be brought into the fight against climate change

Reducing emissions will be challenging for carbon intensive industries. Companies in hard-to-abate sectors that can transition towards lower-carbon processes will gain a true competitive advantage that should benefit investors.

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The necessity of pursuing environmental improvements in hard-to-abate industries

The necessity of pursuing environmental improvements in hard-to-abate industries

Focusing on traditional, unadjusted carbon footprints can be misleading and inconsistent with a net-zero economy. Enhanced carbon footprint assessment that looks at additionality is essential to illustrate the opportunity arising from the climate transition.

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Adapting to the inevitability of climate change

Adapting to the inevitability of climate change

Adaptation is another source of investment opportunity in an increasingly carbon-damaged world. Climate change is already a costly reality. This creates growth opportunities for companies whose activities improve resilience.

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Five reasons why the oil shock and COVID-19 could accelerate the climate transition

Five reasons why the oil shock and COVID-19 could accelerate the climate transition

We expect the oil price crash and the COVID-19 virus will have a positive impact for climate transition strategies. Historically, low oil prices would typically have a negative effect on the speed and scale of the transition to a net-zero economy. But today, market dynamics are much more complex. The combination of policy, market forces and consumption dynamics look increasingly supportive for the ongoing decarbonisation of the mobility, renewables, green technology and hydrogen sectors. Other industries – such as legacy, fossil fuel energy and air travel - are likely to are likely to see a prolonged negative effect.

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The necessity of pursuing environmental improvements in hard-to-abate industries

The transformation from the WILD to the CLIC economy

We believe the economy needs to transform to ensure a more sustainable future. This transformation means moving away from our current economic model that is Wasteful, Idle, Lopsided and Dirty, or the WILD economy. We see a future economy that is Circular, Lean, Inclusive and Clean. How would this CLIC economy look?

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