China’s pledge to reach carbon neutrality by 2060 is a significant step in the fight against climate change. Where are the potential winners of this structural transition?
11 Nov 2020
9 minutes
Wenchang Ma
Leo Lin
George Cheveley
The fast view
China’s surprise pledge in September to cut its net carbon emissions to zero within forty years has reignited hopes of limiting global climate change to tolerable levels. These hopes were reinforced a month later at China's fifth plenum, which revealed the government's long-term development plan for the country — its 2035 vision.
Achieving net zero would require a radical reconfiguration of China's economy, with significant investment implications.
On the one hand, there are growth opportunities as enablers of carbon neutrality become increasingly important. On the other, companies that don’t adapt to a greener world could be left behind.
We’re excited by these developments as they show how serious China is about reinvigorating action on climate change. This structural shift means huge potential across China’s equity universe – the key will be knowing how to pick the winners, and how to ride this wave of change.
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