An additional USD 100 trillion in green investment is needed to “bridge the gap” and achieve net zero by 2050, according to a report by BNY Mellon Investment Management.
Written in partnership with Fathom Consulting, the report said that, although green investment is increasing, the world is “significantly behind schedule”.
The report calls for more action from governments, corporations and asset allocators to “facilitate the net zero transition”, noting that nearly half of all corporate sector spending will need to be directed towards energy and utility firms’ climate transition, despite only representing 6% of global markets.
Corporations in the S&P 500 alone will need to commit up to USD 12 trillion to green capital expenditure by 2050 to meet net zero targets.
The research also estimates a potential USD 20 trillion in assets will become stranded during the transition, a number which will “increase the longer the transition is delayed”.
Shamik Dhar, BNY Mellon Investment Management’s Chief Economist, said: “Achieving net zero by 2050 will require transformational investment, but it is attainable. Wider policy action is needed to accelerate the pace of decarbonisation and there have been calls for a global carbon tax, but we think a coordinated approach is unlikely, so other incentives must be considered.”
The report highlighted potential “considerable opportunities” for investors created by green investment.
Suppliers providing decarbonisation solutions could profit, as well as companies producing battery storage, grid infrastructure and piping for carbon capture, hydrogen and natural gas, the report suggests.
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