Supporting the
transition towards
a low-carbon future
As transition finance scales, a growing range of opportunities are presenting themselves for individual investors to participate in.
The opportunity to finance the transition to a low-carbon economy is both more compelling and more crucial than ever.
The commercial case continues to grow, with the green economy delivering total returns of 198 per cent over the past 10 years, outpaced only by tech stocks.
At the same time, the urgency of the transition remains stark and global average temperatures exceeded the 1.5 degrees celsius threshold for the first time last year, making it the warmest year on record.
Transition finance – financial services provided to corporates and financial institutions to support them in aligning their business and/or operations with a 1.5 degrees celsius trajectory – will be key to a low-carbon economy.
It is needed to facilitate the shift towards more sustainable business practices and investments, especially in high-emitting or hard-to-abate sectors like shipping, agriculture and steel, where fully ‘green’ solutions are either not available or economically viable in the intermediate term.
With a long-standing presence in parts of the world where the need for transition finance is acute, and a wealth of experience as a first mover in this space, we continue to provide solutions to support corporates, financial institutions, and affluent clients across our markets on their decarbonisation journeys.
As transition finance scales and the market continues to mature, a growing range of transition opportunities are presenting themselves for individual investors to participate in.
Transition investing involves either directly, or through fund structures, to intentionally direct capital flow towards the decarbonisation of the global economy, fund those companies that are actively decarbonising, and ultimately play a role in supporting progress towards the goals of the Paris Agreement.
Channeling private wealth capital can have demonstrable impact, especially across emerging and developing markets where it is estimated that USD2.4 trillion a year of climate-related investment is needed by 2030, a four-fold increase from current levels.
To be able to address this gap, there is a need to attract all types of public and private capital, including capital from individual investors to support not only transition, but also adaptation and resilience, and the conservation and restoration of nature.
It is encouraging to note the results from this study where we found that high-net-worth investors have expressed strong interest in transition investing and are keen to invest their capital towards the facilitation of decarbonisation activity in pursuit of making a positive environmental impact.
Alongside the survey, our newly launched Transition Investing guide is designed to support this investor ambition. We hope that the guide proves useful for our clients as they explore the opportunity to participate in transition investing.
What is transition investing?
87 per cent of affluent investors are keen on this nascent concept, with women and young people showing the stro…