100 days since COP26 but little progress made

Investors must look for innovation beyond renewables

This week marks 100 days since COP26, but developments since the conference appear few and far between.

As the investment industry, and world, gears up for COP27 in Egypt in November, all eyes will be on governments to enact pledges and put policies in place, but investors also need more, and innovative, investable solutions in which to channel pledged private capital.

Investment in renewable energy will need to triple by the end of this decade, the International Energy Agency warned, and must hit $1trn (£742.5bn) by 2030 if we are to reach net zero. But for investors to make progress on COP26, they will have to go beyond renewables, said Eleanor Fraser-Smith, vice-president and head of sustainability at Victory Hill Capital Advisors.

“Although private investment in the global energy sector will provide the different energy mix required, a broader and more global view is essential,” she said.

“Instead, we need flexible energy generation, efficiency, battery storage, grid digitisation and there is opportunity for a circular carbon economy through carbon capture and reuse. To achieve net zero on an intentional scale, we need more emphasis on investing into the process of developing and emerging economies to enable access to affordable clean energy.”

Patrick Thomas, head of ESG investing at Canaccord Genuity Wealth Management and ESG Clarity Committee member, added: “It’s worth separating energy transition into demand (electric vehicles) and supply (wind, solar and probably, down the line, nuclear) in terms of city-strutting investment themes.”

For example, smart cloud-based charging infrastructure for electric vehicles, battery recycling and super thin solar panels that can be printed in rolls. “There is lots of exciting innovation beyond the big picture of clean energy generation and storage becoming very cheap versus the fossil fuel story,” he added.