This event continued our series of webinars highlighting the role of various sectors in carbon transition. Electricity generation is currently a significant contributor to GHG emissions. It is also a key enabler and driver of carbon transition. As the economy is moving toward electrification (for example, increasing use of electric vehicles, heat pumps, and other forms of substitution of fossil fuels by electricity as the source of energy), it is becoming imperative to make sure the power utilities sector is rapidly switching to renewables away from coal, gas, and oil.
Investors have a key role to play in supporting the power utilities sector in this transition. They can, and should, engage with issuers, including both governments and companies. A practice of negative screening of companies involved in thermal coal is widely used, but it is not enough to move things forward as quickly as needed. Businesses relying on coal need to be nudged toward replacing it with other sources of energy as much as feasible. New technologies are likely to be required, and investors can benefit from allocating capital to their development. Governments, driven in part by advocacy efforts, need to create conducive regulatory conditions to stimulate investments in renewable energy.
Gagan Sidhu, Director, Centre for Energy Finance, Council on Energy, Environment and Water, who had previously held leadership positions in renewable energy and investment banking discussed these issues with Justin Kew, a member of the CTI Steering Committee and a senior ESG professional with many years of experience at Carmignac, Fidelity, J.P. Morgan AM, and other asset management firms.