$150 trillion to achieve net-zero emissions: A playbook for financing climate solutions #atomicIdeas

Sustainable investment leaders Nili Gilbert and David Blood discuss the critical role of financial capital in tackling climate change.

They explore the challenges and opportunities in accelerating investment towards climate solutions, emphasizing the unprecedented potential for sustainable growth.

Financial capital is crucial to addressing climate change.

While there has been progress towards investing in climate solutions, it is not happening at the necessary speed or scale to meet global decarbonization goals by 2050.

This transition could potentially be larger than the industrial revolution and faster than the digital revolution.

Accelerating this transition comes with several challenges, including dependence on businesses and entrepreneurs for innovation, changes required in public policy and regulation, lack of tools to evaluate company’s decarbonization efforts, and changing perceptions about capital allocation.

Just imagine creating a transition that is greater in scale than the industrial revolution to be delivered in less than 30 years. It’s an unprecedented opportunity for impact. – Nili Gilbert

Investors who do not consider climate are running significant risks in their portfolios and are not fulfilling their fiduciary duty. – David Blood

Despite these challenges, optimism exists about achieving net-zero emissions.

With institutions committing up to $150 trillion towards net zero targets and no legal barriers preventing investors from allocating capital to sustainable solutions, there is enough capital available for this transition.

Three key areas require financial investment: limiting finance for fossil fuels; scaling up finance for clean energy; investing in reducing demand for fossil fuels.

Hard-to-abate sectors like cement, steel, aviation, shipping which account for almost a third of global emissions present significant opportunities for sustainable growth.

The aviation sector is ready for sustainable scaling due to rising corporate demand for sustainable aviation fuel (SAF).

However, current supply of SAF cannot meet demand or sector goals by 2030 or beyond.

Therefore investments should support multiple production pathways for SAF including ethanol-based fuels and those made from captured carbon dioxide or municipal solid waste.

Transformational change across industries, financial institutions, civil society and public policy is crucial in tackling climate change impacts.

Finance plays a vital role in enabling society to achieve its ambitions, with climate-led investing emerging as an asset class.

The transition towards a sustainable economy is a ‘massive multigenerational opportunity for growth, sustainable growth’.

This transition presents an unprecedented opportunity to create impact on a scale greater than the industrial revolution but delivered in less than 30 years.