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.
Protect the
Earth’s climate
Foster energy
independence
Long-term insulation
against inflation
Invest for your future - act for the planet
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, as of 1 April 2022
Source: United Nations, as of 13 January 2022
Source: NASA, as of 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
US$
Trillion
5.7
3-6x
Annual investment needed until 2030, including the need to redirect US$0.7 trillion annually away from fossil fuels and towards energy transition technologies
Source: IRENA World Energy Transitions Outlook 2022,
as of 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,
as of 2022
Far-reaching socio-economic benefits can be unlocked by accelerating the transition
Protecting the climate
3.3-3.6 billion 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,
as of 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,
as of 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
US$366 Billion
Renewable energy attracted US$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 12 million 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
US$67.4 Billion
Transport & mobility raised US$67.4 billion 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 2021
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, as of 2022; *Carbon Capture and Storage; **Bio Energy with Carbon Capture and Storage