THE BIG PICTURE
We have identified three major areas that have the potential to help limit the effects of climate change and drive the necessary low-carbon technology investments, as outlined below:
- Invention, innovation and large-scale deployment of zero or low-carbon technologies and clean energy assets that can compete with and replace carbon-intensive assets and fossil fuel-based technologies;
- Globally co-ordinated carbon limits and prices; and
- Re-alignment of the investment chain towards the longer term.
Whilst the first of these is trending in the right direction it is unlikely to happen fast enough without the fundamental support of the other two areas - policy and finance. Whilst a global policy is emerging, it is doing so at a very slow rate, whereas finance not only has momentum but also has growing support from a broadening group of stakeholders. Both entrepreneurs and governments are keen to see investors take a longer term view in their investments, especially those at the top of the investment chain, the institutional investors, or asset owners – pension, superannuation and sovereign wealth funds. The re-alignment of the investment chain towards long-term, sustainable objectives is not only achievable, but relatively simple in approach. It will help support the transition towards a low-carbon economy. The work of the Asset Owners Disclosure Project has the power to accelerate this transition, driving investment into low-carbon assets.