Energy Transition
Seeking to capture the power of the Energy Transition with Thematic Investing
Recent years have truly exposed the weaknesses and vulnerabilities of a system heavily reliant on 20th century fuel sources. Efficient renewable technologies, by contrast, can form a system less prone to market shocks, improving resilience and energy security through the diversity of supply options and actors. The Energy Transition presents a host of opportunities for thematic investors to potentially generate returns while making a tangible contribution to some of humanity’s greatest challenges.
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against inflation
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Marketing Communication
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of March 2022. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results.
Date of first use: July 2022
Due to the crisis in Ukraine, bringing new levels of inflation, concern and uncertainty.
Continues to hamper recovery efforts, while citizens globally worry about the affordability of their energy bills.
Caused by greenhouse gas emissions are increasingly evident around the world.
11.96%
Renewables share of global energy consumption, 2020
Source: Wall Street Journal, April 1st 2022
Source: United Nations, January 13th 2022
Source: NASA, 2022
Facilitating the Energy Transition
has never been more important
of current greenhouse gas emissions are linked directly to the burning of fossil fuels for energy
75%
Source: BP Statistical Review of World Energy, as of 2020
Facilitating a large emissions reduction in the energy sector is paramount to averting the worst effects of climate change.
The Energy Transition
describes the pathway towards transformation of the global energy sector from fossil-based to zero-carbon by the second half of this century
Six technological avenues pace the way to achieving this goal
Renewables
Energy Efficiency
Electrification
Hydrogen
CO CCS*
2
BECCS**
Significant and sustained investments are needed to facilitate the energy transition
$
T
5.7
3-6x
Annual investment needed until 2030, including the need to redirect USD 0.7 trillion annually away from fossil fuels and towards energy transition technologies
Source: IRENA World Energy Transitions Outlook 2022
Current financial flows are 3-6x lower than levels needed by 2030, to limit global warming to below 1.5 or 2°C
Source: IPCC Working Group III Contribution to AR6, 2022
Far-reaching socio-economic benefits can be unlocked by accelerating the transition
Protecting the climate
3.3-3.6bn people already live in settings highly vulnerable to climate change - emissions reductions can safeguard our planet for generations to come
Source: IPCC Working Group II Contribution to AR6, 2022
A new industrial boom
Renewable and other transition-related industries are expected to add 85 million jobs worldwide by 2030
Source: IRENA World Energy Transitions Outlook 2022
Achieve energy independence
Reducing global dependence on a small number of fossil fuel-producing countries may enhance geopolitical security in times of conflict
Cheap & stable energy supply
Renewable energy can be a more efficient and stable energy source, reducing consumer exposure to the
price volatility of fossil fuels over the long-term
Renewable Energy
$366 Billion
Renewable energy attracted $366 Billion in investment in 2021, up 6.5% from 2020.
Source: BloombergNEF 2022, as of 2021
Investors are taking action across key sub-themes
200 - 700%
The potential economic payback through to 2030 for accelerating renewables deployment & efficiency measures
Source: IRENA Global Renewables Outlook 2020, as of 2020
Energy Efficiency and Sustainable Building
58.3 Million
Jobs can be created by 2030 in energy efficiency, power grids, flexibility, and hydrogen more than offset losses of 12M jobs in the fossil fuel and nuclear industries.
Source: IRENA WETO 2022, as of 2022
38%
The building sector is responsible for
36% of global energy consumption and 38% of energy-related Carbon emissions.
Source: WEF Green Building Principles 2021, as of 2021
Sustainable Mobility
$67.4 Billion
Transport & mobility raised $67.4B in 2021, supporting manufacturing hubs for EVs, e-scooters, batteries and more.
Source: BloombergNEF 2022, as of 2021
145 Million
Global electric vehicle stock is expected to increase from 11 million in 2020 to almost 145 million vehicles by 2030.
Source: IEA Global EV Outlook 2021, as of 20211
Learn more about Environmental Challenges
Soaring oil and gas prices
COVID-19 pandemic
Impacts of climate change
Source: Climatewatchdata.org as of 2018
Source: IRENA World Energy Transitions Outlook 2022; *Carbon Capture and Storage **Bio Energy with Carbon Capture and Storage