Every company has investment opportunities related to the transition to net-zero carbon emissions.
Through my work at HSBC, I’ve advised a diverse range of companies—from luxury goods companies to oil and gas producers. The pathway to net zero for every company is different, but there are opportunities in the energy transition for all. Banks are evolving to help their customers capitalize on this opportunity.
For example, HSBC now offers Sustainability Linked Loans to support our clients that are seeking to transition to a more climate-friendly, low-carbon future and contribute to sustainable growth. More information on this and other products available can be found at www.business.hsbc.ca/sustainability.
Thanks to financial innovation, rapidly developing clean solutions, and government action, the net–zero economy promises a more prosperous, and sustainable future the world over. So, how do we get there? Here are the major milestones we need to hit to achieve net-zero emissions by 2050:
By 2022, we must…
Embed sustainability into all investment decisions and expand the use of carbon pricing. The world needs to follow Canada’s lead. I’m a huge proponent of market-led initiatives and we’ve seen great progress in the clean economy through industry collaboration. A number of asset owners and managers have set net-zero commitments, and over 1000 corporates globally have set Science-Based Targets that will align their businesses to the goals of the Paris Agreement. That being said, the private sector needs a carbon price to provide policy certainty and make climate action economically viable.
By 2030, we must…
Scale renewable energy and electrify everything. As we decarbonize the power sector with investments in renewable energy, the electrification of buildings, transport and industry will help us reduce emissions at the pace we need to meet Paris Agreement goals. Canada is well-placed for this transition given its existing low-carbon electricity grid.
Of course, there are some sectors where electrification won’t work. In those sectors, we’ll need to focus on energy efficiency and offsetting while investing in research and development for innovative long-term solutions.
By 2050, we must…
Tackle the innovation gap. We need more effective carbon capture and utilization technologies, better land use policies, and game-changing innovations like competitively priced green hydrogen energy.
Secondly, we will all need to change our behaviour. To achieve and maintain a net-zero economy, we need to consume less. With the COVID-19 pandemic, we’ve just experienced a global crisis that required drastic behaviour change—and the climate crisis will demand much more of us. This will be a major challenge to overcome in the coming decades.
To reach net zero by 2050, we need to hit these short-, medium- and long-term milestones and to hit these milestones, we need to start working now. The sooner we start, the closer we get to a better future.
They say it’s not about the destination, it’s about the journey. We’ve got quite a journey ahead of us.
For more insights on the race to net zero, check out the GLOBE Capital session that Farnam Bidgoli is speaking at: Destination Net Zero: Corporate Strategies for Achieving Carbon Neutrality by 2050.