Climate investments II: energy use and emissions


Climate change is a fact, and we are already feeling its effects. To limit global warming to below 1.5°C, the global economy needs to be reoriented and our investments can contribute. There are different perspectives on climate-related investing. Next to the energy production perspective, energy usage and non-energy related greenhouse gas emissions are other important pieces of the puzzle. Continue reading to find out about our take on it.

As we know today, climate change also goes beyond “clean” energy and the issue of energy production. It is also relevant how much and which energy sources are being consumed (e.g., in mobility or steel production), where other greenhouse gases are emitted in addition to the combustion of fossil fuels (e.g., cement production or livestock farming) and how much carbon-absorbing nature is destroyed due to land-use changes. Considering the latter points, it turns out that the mobility and transport sectors, the food and agriculture sectors, the textile industry, the timber industry, the chemical and cement industries, and the real estate sector are the main drivers of climate change next to the energy sector itself.

Solutions beyond green energy are needed

Like on the energy production-side, we see a variety of existing and emerging solutions, that can significantly mitigate climate change and provide investment opportunities: from electric mobility, vegetarian or vegan food alternatives through regenerative agriculture, reforestation and sustainable forest management to alternative building materials and carbon capture and storage. We are convinced that these and more upcoming solutions will shape the future within the high-emitting industries and represent ideal investment opportunities.

Every Company generates Greenhouse Gases – it all comes down to the masses

Just as every individual bears a certain responsibility for climate mitigation, every company generates greenhouse gases and is therefore responsible to minimize them, too – no matter the quantity. Thus, in principle, every company`s climate impact can be assessed. Today, it is possible to calculate which company is aligned with the Paris Climate Agreement and the 1.5-degree target and which company runs counter to this target. Companies that are on a 1.5-degree path should be encouraged and supported. Investing in such companies can be interesting, especially since they have little to no climate adaptation costs to worry about in the future.

To summarise: Even though the energy sector is at the center of climate change mitigation, other industries bear similar responsibilities through their energy consumption, greenhouse gas emissions from chemical processes (i.e., concrete production), pollution and land conversions (i.e., deforestation). New, low-carbon solutions within these sectors are partially already available and partially in development. Climate investing means investing in these solution providers and supporting carbon-efficient companies which are on the 1.5 °C temperature alignment path. But it also means pushing for more – through communication and advocacy.

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