Asia requires $7.7 trillion for renewable energy transition

A new report concludes that US $7.7 trillion in renewable energy and energy efficiency investments are needed to meet the combined electricity demands of China, India, Japan and Southeast Asia.

The report was released in conjunction with the launch of The Asia Investor Group on Climate Change (AIGCC): an initiative to create awareness among Asia’s asset owners and financial institutions about the risks and opportunities associated with climate change and low carbon investing.

It reviews the disclosure of leading domestic financial institutions across the Asia Pacific region in an attempt to accurately determine the region’s response to climate change, and to gain insight into emerging and future trends for investment and lending activity.

The report includes analysis of 36 banks, 30 investors and 24 insurers.

The report concludes that huge sums of investment are required in the renewable energy industry if the world is to avoid surpassing global warming of 2 degrees above pre-industrial levels, as agreed in the Paris Agreement last year.

Emma Herd, CEO of the Investor Group on Climate Change (IGCC), expressed hope for the future: “The finance sector has recognised the opportunity and is gearing up fast. While it’s clear that progress is uneven and gaps remain, such as a need for greater focus on climate risk in investing, progress over the past two to three years has been remarkable. There’s no doubt that a great transition is on.”

Authors of the report noted that “Nations across the Asia Pacific are critical in the global effort to tackle climate change. A large number of Asia Pacific countries are investing in the policy framework and commitments necessary to drive investment into climate solutions.”

31% of the institutions analysed in the new report factored climate change risk into their financing operations. Over a quarter of the banks analysed referred to climate change factors as a reason to limit financing, and 81% disclosed their policy on responsible lending.

 

These topics and more will be discussed at the Sustainable Investment Forum, taking place on September 20th 2016 in New York. For more information and to register, visit the website athttp://www.sustainableinvestmentforum.org/.