Banks and funds – are going to be crucial to the #NetZeroShift. Should they invest in purpose driven businesses and divest from others?

INVEST vs DIVEST

Money goes where it gets the highest return, the markets function on that premise. Equities and bonds are priced keeping in mind the risk potential. The risk premium for green investing vs others will decide whether an investment needs to be made or not. India needs over USD 400 billion in capital investment which could save over 100 GW of energy and 1.1 billion tonne of greenhouse gasses between 2015 and 2030,

PURPOSE

Corporate disclosures on their own or brand purpose wont reduce emissions unless business models change.

FUNDAMENTAL RESEARCH

51 billion tonnes of CO2 needs to be removed from the atmosphere. It won’t happen without reliable access to clean energy, sustainable aviation fuel, green steel and cement or a substitute material. Companies in fundamental research will move the needle for a NetZero world.
Brand purpose is a statement of intent, corporate disclosures are about what you did in the past year, innovation is about how you are designing the world. In the past few decades we designed products because we could and created campaigns that propagated a genuine or manufactured need. Now we need to design products and innovations because of the existential crisis we find ourselves in.

STEADY + SCALABLE

Changing the way we make things and grow things is not a quick software fix. It requires change at a fundamental level and reliability so that it can be scaled up. The speed of the digital economy may not be replicable when it comes to fundamental research. However digital can certainly speed things up once the fundamentals are clear.
“The digital economy has fooled us in terms of how quickly things can change, because you don’t need the reliability and scale, and therefore the capital and the regulations.” Bill Gates

CARBON PRICE

Why does a Rs 1 plastic pen exist? Why do we have Rs 100 polyester t shirts? – The price of both these products doesn’t account for the polluting impact they will ultimately have. Unless we account for the cost of carbon, we will continue to do business as usual. #climatechange #circulareconomy.