Transitioning to net zero

rethink sustainability

Transitioning to net zero

Our global economy is already in the midst of a massive, wholesale transformation towards a sustainable, net-zero economy. Investors have trillions at stake in this Climate Transition, which we believe will create significant value and fundamentally shape portfolio outcomes in the years to come.

To achieve the goals of the Paris Agreement we need to reduce carbon emissions 50% by 2030 and to net-zero by 2050. According to our analysis, this will create a $5.5 trillion investment opportunity annually for the next fifteen years.

The transition is already accelerating, powered by a positive feedback loop of policy and economics. Market forces are now in the driving seat. Cleaner is becoming cheaper, and demand from investors and consumers is surging.

Investors have trillions at stake in this Climate Transition, which we believe will create significant value and fundamentally shape portfolio outcomes in the years to come.

This builds on initial policy support and paves the way for regulators to increase their ambitions further. We are seeing this effect today in clean energy, in mobility in the circular economy, and across virtually all industries. 

Carbon is deeply embedded in our economy and society. We have relied on the convenience and efficiency of fossil fuels to drive economic growth since the dawn of the Industrial Revolution. This is why the transition to net-zero will affect every single sector and will create significant growth opportunities and competitive advantages for some companies over others.

We need to reduce carbon emissions 50% by 2030 and to net-zero by 2050. We believe this will create a $5.5 trillion investment opportunity annually for the next fifteen years.

Companies that provide solutions for carbon reduction will benefit, but so will transition leaders in carbon-intensive industries. Carbon emissions are hardest to abate in sectors like transport, power generation, steel, and cement, but these sectors will still be critical to economic growth even in a net-zero economy.

Companies in these industries that are leaders in the race to decarbonise will increase their market share and grow revenues.

This will ultimately benefit investors.

Adapting to a warmer planet also creates opportunities for companies that build resilience.

Companies that provide solutions for carbon reduction will benefit, but so will transition leaders in carbon-intensive industries.

The physical manifestations of a warming planet, such as wildfires, drought and flooding, will continue to accelerate even in a best-case-scenario. Companies that increase our resilience to climate change by strengthening infrastructure, monitoring risks, or spreading the burden of those risks, should also benefit from significant growth opportunities.

At Lombard Odier we believe the climate transition is already one of the most important drivers of risk and return.

Our climate transition strategy captures opportunities across all sectors created by the urgent need to transition to net-zero, and adapt to a warmer climate.

 

Important information

This document is issued by Bank Lombard Odier & Co Ltd or an entity of the Group (hereinafter “Lombard Odier”). It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a document. This document was not prepared by the Financial Research Department of Lombard Odier.

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