Capital markets alignment to a clean energy transition for climate - - PowerPoint PPT Presentation

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Jan 23, 2023 23 likes •166 views

Capital markets alignment to a clean energy transition for climate relevant technologies The focus in on the following The Paris Agreement Capital Transition Assessment (PACTA), results from the Swiss Pilot Study and future developments LIFE16

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Capital markets alignment to a clean energy transition for climate relevant technologies

The focus in on the following

The Paris Agreement Capital Transition Assessment (PACTA), results from the Swiss Pilot Study and future developments

LIFE16 GIC/FR/000061

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High physical risk unrecoverable impact on GDP High transition cost & potential market stability risk

Why do we need to act now?

CO2 Time

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Tracking real economic production at asset level

Coal-fired power plants by geolocation

Source: 2dii, Globaldata

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Linking physical assets to corporates

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Global power production on equity markets 6.7 TW

Source: 2dii

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Index exposure to selected green/brown technologies

Brown: Fossil fuel production, fossil fuel powered electricity generation, ICE car production Green: Renewable power, Electric vehicles, Hydro power, Nuclear

Source: 2dii

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Source: senses-project.org

>5°C Scenario ‘Too late, too sudden’ <2°C Scenario

Integrated assessment modelling to scenarios

CO2 Time

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MegaWatts/Barrels of oil/# of combustion engines etc..

>5°C <2°C

MegaWatts/Barrels of oil/# of combustion engines etc..

Translating regional scenarios to portfolios

6°C <2°C

Time Time

Regional Scenarios Portfolio Benchmarks

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Alignment of portfolios with transition scenarios

0,8 0,9 1 1,1 1,2 1,3 2017 2018 2019 2020 2021 2022 Capacity growth (from 2017)

Coal power - Non-OECD (2017)

0,8 0,9 1 1,1 1,2 1,3 2017 2018 2019 2020 2021 2022 Capacity growth (from 2017)

Coal power – OECD (2017)

Project to be repeated in 2020

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Materiality of risks/Stress testing of institutions Assess exposure to high/low carbon technologies Assess alignment of the plans of companies relative to different scenarios Assess the possible revaluation impact if a certain scenario materialises

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Materiality of risks/Stress testing of institutions

Stock value by future time period (S&P 500)

80 % of the value is from cash flow beyond 2030 55 % of the value is from cash flow beyond 2030

Bond cash flow by future time period

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Materiality of risks/Stress testing of institutions

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