J.P. Morgan: Green energy investment will need to accelerate rapidly

J.P. Morgan: Green energy investment will need to accelerate rapidly

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This week sees the start of COP26 – the 26th Conference of the Parties – where global leaders from almost 200 nations will revisit the climate commitments made in the 2015 Paris Agreement.

As we discuss in our recent publication, getting ahead of COP26 and what it means for investors, enabling the necessary finance to support the energy transition will be a key part of the debate.

Clean energy investment has been rising steadily in recent years, but the latest estimates from the International Energy Agency highlight that investment will need to more than triple over the next decade to stay on track to limit global warming to below 1.5 degrees Celsius.

A likely consequence for investors is a sustained increase in green bond issuance, as governments and corporates look to tap into more favourable financing costs to fund new climate-focused spending.

USD billions, global investment in clean energy and energy efficiency

0111 JPMorgan

Source: International Energy Agency (2021), World Energy Investment 2021, J.P. Morgan Asset Management. For illustrative purposes only. Data as of 30 September 2021.