The road to net zero
In order to reach net zero targets, more than half of an estimated US$100 trillion investment will be required in emerging markets (EMs). Indeed, more investment will be needed in the BRICS (Brazil, Russia, India, China and South Africa) than in the G7, according to new research by BNY Mellon Investment Management and Fathom Consulting.
China also needs more green investment than any other country, according to the report.
There are a few reasons for this; First, the country is large and already accounts for more than 15% of global GDP. Second, it is expected to grow faster than most economies between now and 2050 and more investment, including green investment, will be needed to support this growth. Third, a higher-than-average share of electricity production in China comes from fossil fuels and the country also has an above-average CO2 intensity of GDP.
Shamik Dhar, Chief Economist, BNY Mellon Investment Management
Glossary
Net Zero: The balance between the amount of greenhouse gases produced and the amount removed from the atmosphere.
Green investment: Investing activities aligned with environmentally friendly business practices and the conservation of natural resources.
G7: An inter-governmental political forum consisting of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States.
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There is no guarantee that any strategy that considers environmental, social, and governance (ESG) factors will be successful, or that any strategy will reflect the beliefs or values of any particular investor. Because ESG criteria exclude some investments, investors may not be able to take advantage of the same opportunities as investors that do not use such criteria. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission.
BNY Mellon Investment Management is one of the world’s leading investment management organizations, encompassing BNY Mellon’s affiliated investment management firms and global distribution companies. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation and may also be used as a generic term to reference the Corporation as a whole or its various subsidiaries generally.
While Fathom's proprietary climate data and tools were used to develop the sectoral risk framework presented in the Report, Fathom Consulting is not affiliated with BNY Mellon.
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