Full Title: Global Investors Move Into Renewable Infrastructure: Reviewing the World’s Top Renewable Energy Financiers
Author(s): Tim Buckley, Saurabh Trivedi
Publisher(s): Institute for Energy Economics and Financial Analysis (IEEFA)
Publication Date: July 20, 2021
Full Text: Download Resource
Description (excerpt):
Low carbon energy transition assets are creating investment opportunities, and they have also demonstrated significant resilience, consistently attracting capital despite the COVID–19–induced global economic crisis.
In financial year (FY) 2020, the clean energy sector received record investment commitments totaling US$501 billion –9% more than the previous year. The renewable energy segment led with US$303bn in 2020, which is 60% of total investment committed into the overall low carbon energy transition sector.
In addition to the inherent advantages of investment in the clean energy sector such as relatively higher risk–adjusted returns and stable project cashflows, the COVID–19 stimulus packages of some governments, especially in Europe and South Korea, put green investment at the forefront of recovery plans, driving further clean energy investment.
The net-zero emissions by 2050 financial alliance pledges of 2021 have created a strategic shift in dialogue, building on the Paris Agreement of 2015 to now emphasize the role global finance can play in working to limit global average temperature increases to 1.5 °C above pre–industrial levels. The Paris Agreement stipulates finance will be critical on two fronts –divestment away from carbon intensive assets and mobilizing capital towards low carbon energy transition assets. Investors have been pressuring fossil fuel companies via divestment or engagement and in recent years, investor–led momentum for stronger climate action has been building, as tracked by IEEFA.