The rise of transition finance
The vast financing required to transition to a decarbonised global economy presents diverse opportunities for investors. ‘Transition investments’ exist across industries, regions and asset classes – our experts explain how to identify and evaluate them.
Transition talks
We interview industry experts to help you understand what’s happening in the real world when it comes to the transition.
In conversation: A disorderly transition
To get to net-zero we have to finance the high emitting sectors and regions from a state of high carbon to a state of low carbon. The path to getting there is not simple or clear. Head of Thematic Equity Tom Nelson and Sustainability Specialist Annika Brouwer discuss the disorderly transition that is underway.
In conversation: A disorderly transition
To get to net-zero we have to finance the high emitting sectors and regions from a state of high carbon to a state of low carbon. The path to getting there is not simple or clear. Head of Thematic Equity Tom Nelson and Sustainability Specialist Annika Brouwer discuss the disorderly transition that is underway.
In conversation: A disorderly transition
To get to net-zero we have to finance the high emitting sectors and regions from a state of high carbon to a state of low carbon. The path to getting there is not simple or clear. Head of Thematic Equity Tom Nelson and Sustainability Specialist Annika Brouwer discuss the disorderly transition that is underway.
Introduction to transition investing
The term ‘transition investing’ describes allocations that finance progress towards net zero. It covers investments in industries and infrastructure that are helping the energy transition, as well as targeting high-emitting sectors that require substantial financing to implement their climate strategies. Critical to transition investing is having a credible way to determine which companies can effectively transition.
Investing in the transition can take the form of equity or debt, as well as project financing.
Enabling the transitionInvestments in industries and infrastructure enabling the energy transition. |
Focusing on high emittersInvestments in high-emitting sectors where credible climate transition plans require financing. |
Examples include:
- Investments in high-emitting, hard-to-decarbonise industries such as steel, cement and chemicals, supplying them with the capital they need to decarbonise.
- Investments in high-emissions regions, particularly emerging markets, providing capital to facilitate progress towards net zero.
- Investments in the infrastructure transformations required to achieve net zero, such as upgrading electrical power grids and transmission systems.
- Investments in decarbonisation innovations and projects, such as green hydrogen and carbon capture and storage.
Understanding the transition
This research paper makes the case for transition investing and explains how to identify a true ‘transition asset’.
A disorderly transition
The path to net-zero is not simple or linear. It’s complex and probably messy. But in disorder there is opportunity.
Evidence suggests the transition to a low-carbon economy will be disorderly. By allocating to ‘transition assets’, investors can mitigate some of the disorder, while potentially generating positive outcomes for their portfolios.
Accessing transition investments
Find out how Ninety One is incorporating ‘transition’ into its investment research and analysis
Read the paper Ninety One’s net-zero strategy
For more information on dedicated transition investing, contact your local team to meet our transition experts