To fight climate change, studies show that we will need to invest $3.5 trillion annually until 2050 – the greatest relocation of capital in history. A successful energy transition will require businesses to work toward net-zero, while also maintaining both profitability and energy reliability. How? Companies will need to focus on 3 things:
- Take advantage of demand for green technologies. According to McKinsey, demand for green offerings across 11 categories (including things like materials, energy, climate tech, etc.) could generate $12 trillion in annual sales by 2030.
- Invest in existing and future solutions that balance short-term “low hanging fruit” with long-term ambitious investments. For example, companies might decarbonize internal operations through initiatives that pay for themselves – things like efficiency, clean energy sources, and waste reduction. Over the longer term, businesses can more gradually adopt emerging technologies, like grid modernization or carbon capture.
- Create partnerships to decrease complications. For example, green fuels consortiums like those surrounding hydrogen hubs can accelerate development, while also reducing risks and costs.
Let’s be clear – reaching $3.5 trillion will be challenging. However, it makes sense for businesses to transition, especially considering new competitive advantages. Companies that do not make climate a priority will likely be playing catchup in the decades to come.
So, what are the latest investments being made in the space? Let’s take a look at some top breakthroughs this month: