Net Zero alignment could create investment opportunities worth $5.5 trillion annually over the next fifteen years.
We are in the midst of a transition to Net Zero. As investors, we have to rethink our portfolios across the board - and it hasn’t happened fast enough. Portfolios should reflect net zero ambitions, but this doesn’t mean just investing in companies that have a low or no-carbon footprint today. Exciting opportunities come from places you might not expect.
Many of today’s sustainability focused strategies exclude the companies that will ultimately contribute the most to future CO2 reductions
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Can whales help cool the temperature of our planet? A whale’s body can store up to 33 tonnes of harmful carbon dioxide. When they die and sink to the ocean floor, all that carbon is stored there for centuries...
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Oceans are the source of at least 50 per cent of all oxygen produced on Earth. Yet industrial fishing, offshore oil exploration and using the ocean as the world’s dumping ground for plastics and harmful chemicals have placed this fragile ecosystem...
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A revolution in retail recycling? Unwanted goods create mountains of waste and cost retailers hundreds of billions of dollars.
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Hundreds of billions of dollars are wasted in customer returns.
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Intriguing technologies are emerging which could lead to zero emissions aviation.
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The long haul to zero emissions aviation. Intriguing technologies are emerging which could lead to zero emissions aviation. Bio and synthetic fuels are viable, but still expensive and not perfectly clean.
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The world is choking on plastic waste. Less than nine per cent of it is recycled, but an emerging industry promises to change all that. The FT’s Charlotte Middlehurst discovers how chemical recycling...
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Investors are getting excited about chemical recycling, but campaigners see it as a distraction
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If renewable energy is going to provide a steady source of energy to power grids, we need to find ways of storing it. Lithium-ion batteries are currently the dominant technology, but new rivals are emerging.
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Renewable energy sources such as wind and solar power are now becoming viable alternatives to fossil fuels. But for electricity grids, constantly matching supply with demand becomes much harder when you strip out coal and gas-fired plants that provide...
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The coronavirus pandemic is a tragedy, but the FT’s Martin Sandbu believes it could also be a once-in-a-lifetime chance to rebuild better economies that work for everyone.
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The pandemic has brought the economic polarisation seen in many countries sharply into focus. We’ve seen many of those in humbler occupations that we all depend on marginalised by Covid-19.
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Patagonia and Stella Mccartney have been singing the tune of ethical fashion for a few decades, but it wasn't until the past few years that some of the most exciting innovations in environmentally conscious fashion have been launched.
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Could the second-hand clothes market help support a circular economy? With over 80 billion garments being produced every year and garments only being worn 7 times before being thrown away, the fashion industry has a massive negative environmental impact.
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Aluminium is lightweight, durable, and 100% recyclable. It’s also a key input for numerous industries. But today, the aluminium sector contributes about one per cent of global greenhouse gas emissions.
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Amidst the growing appetite among companies and investors for disclosure of environmental, social and governance data, the London Metal Exchange plans to launch a platform which trades ‘low-carbon’ aluminium.
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After a tumultuous 2020, Lombard Odier's Kristina Church looks ahead to what investment trends we can expect to see in 2021, and shares insights into how new regulations in sustainability will impact businesses.
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Start up, Dendra Systems, aims to restore ecosystems and biodiversity using AI and drones. With the ability to analyse an entire ecosystem down to a blade of grass, Dendra Systems hopes to restore and reforest areas around the world that have been damaged
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The world is continuously looking for alternative protein sources. The FT’s Paris Bureau Chief Victor Mallet discovers how insect protein is reinventing the food chain and alleviating pressure on feeding the animals that feed the world.
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As the world’s population rises, the demand for animal protein in particular is increasing the strain on the environment. As a result, hundreds of millions of dollars are being invested in insect protein companies.
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Our economy is in danger of cannibalising itself. Our planet's natural capital - soil, forests, water sources, minerals - is being depleted at a rate that is unsustainable. A shift if needed, but how?
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Behind that unassuming façade, WISErg has spent the past decade working on a potential solution to one of the world’s biggest challenges to sustainability: how to process food waste.
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In the Covid-19 era, employers are looking at a range of innovations aimed at making workplaces safe. These range from materials that can puncture and kill viruses, to germicidal ultraviolet irradiation, to viral furnaces.
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As economies return to work, a range of technologies are emerging to keep us safe from the coronavirus. Some are high-tech, expensive and still at the experimental stage, while others involve adjusting existing technology.
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Agriculture’s entire food chain could account for up to 37 per cent of greenhouse gas emissions.
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It sounds at first like science fiction: giant machines that suck carbon dioxide directly out of the air.
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Our current economic model is wasteful, idle, lopsided and dirty. It is WILD. But we believe a transition is underway to a circular, lean, inclusive and clean economic model. We call it CLIC™.
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How Denmark's Chr. Hansen is using natural products in the transition towards a sustainable economy
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Alice Ross, the FT’s Deputy News Editor outlines the impact agriculture is having on the environment, and what can be done to alleviate the damage.
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Agriculture’s entire food chain could account for up to 37 per cent of greenhouse gas emissions.
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The coronavirus pandemic prompted a huge drop in carbon emissions. As the travel industry begins to rebuild and the summer holiday season hits its peak, how do we ensure a green recovery?
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From bacteria to blue whales and from fungi to flowers, the loss of Earth’s biodiversity and the subsequent damage to our ecosystem is one of the top ten dangers facing society today.
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There is limited time left to reduce emission levels and mitigate climate change risks, but the path to net zero will bring with it significant investment opportunities
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A post COVID world is one that will look quite different to a pre-COVID world.
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It seems inevitable, in the short-term at least, that Wuhan will be remembered most widely outside of China as the city at the centre of the coronavirus outbreak.
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Recycling precious metals and minerals from used electronics can help make today's consumption patterns more environmentally sustainable.
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Digital solutions could be the key to producing more food while protecting the environment
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The consumer movement against plastic food and beverage packaging is gathering momentum, and companies are beginning to respond.
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From homeworking to healthcare, Covid-19 has forced society to adapt in ways that should endure
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For all its horror, the pandemic may change our habits when nothing else could
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When it comes to green issues, many of us assume it’s activists and campaigners who will change the world. But the FT’s Gillian Tett believes that as the responsible investing business continues to grow, so too will the need for financial transparency and
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By 2050, 68% of the global population is expected to live in cities and eat 80% of food produced. Unless we find a way to grow food within or near cities, the ecological footprint of feeding the masses could be devastating.
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Cell- and plant-based meat start-ups are developing ‘cuts’ of steak and chicken
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In a nation where space is at a premium, the Dutch are leaders in creating environmentally friendly buildings. From repurposed redundant structures to modular, transportable studios and floating neighbourhoods, the FT’s Helen Barrett explores three comple
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Five sustainable gadgets for the kitchen and the living room, designed with the wellbeing of the planet in mind
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Whether they’re tracking the origin of valuable assets or allowing consumers to discover more about the sustainability of their purchases, digital technologies are making the supply chain ever more efficient, and transparent.
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Precision weather tracking, ‘blood pressure monitoring’ for plants and complex nutrient analysis apps are now the must-have tools for modern farmers.
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The notion of ‘growing’ a steak in a test tube sounds like science fiction. But our food habits change
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The so-called ESG business space is currently reckoned to be worth more than some $32tn. The FT’s Gillian Tett explains that companies are realising they cannot afford to ignore issues like climate change, income inequality and a whole range of governance
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Globally, we produce 50m tonnes of toxic electronic waste every year — and the UK is one of the worst offenders
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Up to 50 billion tonnes of sand a year is being mined, dredged and even stolen to satisfy the global appetite for infrastructure, according to the UN, and it’s disappearing faster than it can be replenished.
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At first glance, the business of recycling and reusing small electronics sounds neither glamorous, nor lucrative.
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Thousands of Central Americans are trying to flee to the United States in what’s become known as the migrant caravan. Many are escaping violence and extortion, but climate change is also playing a part.
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Lorenzo Bertelli oversees bags made from recycled fabric after joining family group
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Investors are showing greater interest in alternative proteins, as the climate impact of food production comes under the spotlight and the global population continues to climb.
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Roughly a quarter of the 348 million tons of annual plastic production worldwide now goes into packaging, according to Plastics Europe and UK conservation charity the Ellen MacArthur Foundation, making it the single biggest use of the material
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Start-ups are utilising bacteria and fungi to generate protein and boost agriculture.
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Artist Mathieu Lehanneur discusses his work for new exhibit DYSFUNCTIONAL, created in partnership with Carpenters Workshop Gallery and Lombard Odier.
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Theoretical neuroscientist and entrepreneur Vivienne Ming believes that AI and what she calls “augmented intelligence” mean we’ll eventually have people who are artificially smarter than others.
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Men dominate the venture capital scene. A recent UK study found that less than one per cent of venture capital goes to businesses founded by women.
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People are living longer and children have always been expected to look after their parents in old age. But the FT’s Roger Blitz is convinced individuals are becoming more self-centred and less interested in the family.
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Culinary 3D printing is new and rather niche but it could be an answer to some of the food industry's biggest challenges.
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Whilst the traditional home ownership model is no longer viable for many, it hasn’t dampened the appetite for city centre living, nor impacted the growing desire for a smaller environmental footprint.
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As urbanisation accelerates and infrastructure decays, researchers are working out how cities can heal themselves. As the FT’s Nikou Asgari explains, they are carrying out tests on materials that repair themselves and an army of maintenance robots that ca
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A Chinese scientist claims to have created the world’s first genome-edited babies, but won't this cause more inequality in society?
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Chief Economist of Lombard Odier Samy Chaar shares his diagnosis for Europe's economy ""We're not going to run the marathon tomorrow, but we're doing ok"".
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Chief Economist of Lombard Odier Samy Chaar shares his diagnosis for Europe's economy ""We're not going to run the marathon tomorrow, but we're doing ok"".
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Who wants to worry about taking care of the environment when they’re on holiday? No one, according to Xenia zu Hohenlohe, partner at Considerate Group, which is which is why she thinks hotels should do the job for their guests.
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At the end of 2017, China banned virtually all materials for recycling. Before that, it took about 60 per cent of the plastic waste exported by G7 countries.
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Waste in fashion is on a massive scale, and less than one per cent of recycled textiles are converted into new, wearable materials. But very gradually, that may be changing.
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Could computers ever replicate humans and take over the world? It’s unlikely, according to leading neuroscientist David Eagleman, largely because what it means to be human is constantly evolving.
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An investor with ownership in a large forest faces numerous choices, ranging from farming the land, to building houses, to simply selling all the wood
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The internet has rapidly become an indispensable tool, but the FT’s Hannah Kuchler thinks it is seriously flawed and in urgent need of repair.
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Cities across the world are turning themselves into vast sponges.
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Since ancient Rome animal poisons have been used to heal rather than harm the human body. Scorpion venom can be used to help detect and cure diseases, but milking scorpions by hand is a time-consuming and dangerous process.
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One of the most innovative blockchain and cryptocurrency hubs on the planet right now is in Nairobi, Kenya.
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We may think we’re in control of our technology but the FT’s Rana Foroohar believes it may be controlling us. A recent study found that 4 in 10 Americans are suffering from addictive behaviour linked to their phones.
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In the past, Big Data was often compared to oil, because companies could get rich off their deep wells of information. But just like oil, data can be ‘spilled’, with serious consequences.
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Car subscription services, an alternative to owning or leasing a car, are gathering speed. As the FT’s Patrick McGee explains, it could hugely disrupt the traditional car ownership model.
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Didier Rabbatu, Head of Equities at Lombard Odier Investment Managers explains why businesses embracing change and embedding sustainability will soar like Eagles, whilst companies clinging to a dated mindset - sticking their heads in the sand like Ostrich
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Barter is making a comeback. That’s because technology has made it a lot easier to swap things online. It also means people can give away things like personal data to tech companies in return for services.
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The next economic revolution is already underway - and it is driven by sustainability.
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President Trump seems determined to tear apart the global economy by erecting tariff walls and promoting bilateral trade deals. Does this mark the end of globalisation?
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Sea levels are rising, and that could be causing waves of unexpected house price increases in poorer areas of coastal cities. The FT’s Ed Crooks reports on what has become known as climate gentrification.
Watch videoMany of today’s sustainability focused strategies exclude the companies that will ultimately contribute the most to future CO2 reductions
By any stretch of the imagination, Nippon Steel’s facilities at Wakayama on the western coast of Japan’s Kii Peninsula do not have the appearance of a low carbon-footprint operation.
The sprawling mass of grey buildings, snaking pipes and multiple smokestacks have for decades produced steel from scorching furnaces, a visible reminder of one of the world’s most CO2-emitting industries.
But earlier this year, Nippon Steel, the world’s third-largest steel producer, announced that it was investing heavily in hydrogen research and other cutting-edge technologies as part of an ambitious journey towards achieving net zero emissions by 2050.
“We will take on the challenge of adopting ultra-innovative technologies such as mass production of high-grade steel in electric furnaces, drastic reduction of CO2 emissions…and other developments in hydrogen reduction methods,” the company announced in March. “We will aim to achieve carbon neutrality by taking a multi-aspect approach.”
Many of today’s approaches to investing along sustainable lines and in a low-carbon economy might overlook or even exclude Nippon Steel from consideration on the basis of its historic and present carbon footprint – as well as the fact that it resides in a sector that is generally “unloved” by today’s increasingly carbon-conscious investors.
Yet these approaches often fail to recognise that the greatest positive impact on decarbonisation is destined to come from companies that are currently high emitters and that have the commercial need and financial resources to transition to a much lower level of emissions in the future.
As a result, strategies tend to avoid climate-relevant sectors, resulting in reduced portfolio diversification and increased concentration risk. They also fail to recognise that as the world moves towards, companies aligned to that transition gain new competitive advantages and opportunities to gain market share. In short, they risk missing out on the transition opportunity.
Today, the world currently emits 52bn tons of greenhouse gases every year. To limit global warming, these emissions need to be brought to zero, with CO2 emissions falling to net zero by 2050 or before if the world is to limit global warming to 1.5 °C by the end of the century.
Getting there by 2050 is not enough. To limit global warming as intended, we need to reduce our emissions by half approximately every decade. Reducing our emissions by 50% by 2030 is one of the most significant economic challenges of all time – and it will produce plenty of winners and losers along the way.
But accurately picking the winners from the losers requires a holistic and long-term view of companies. It also requires an understanding of the cost, availability and potential of various technological solutions. Only through access to such detailed roadmaps can we understand what the transition will look like, and which players are likely to come out on top.
Nippon Steel, which has estimated its future investment in hydrogen technology at ¥500bn for research and development, and between ¥4tn-¥5tn investment in facilities, is what we call an “ice cube” – a company that operates in a carbon-intensive sector but whose strategies and commitments may bring it into line with the climate-related objectives set out in the Paris Accord.
These types of companies contrast with ones that we call “burning logs” – companies with high emissions that are likely to continue to be high emitters, contribute disproportionately to global warming, and remain highly exposed to transitional risks. As the transition accelerates, these companies may lose their place to more agile competitors.
Nippon Steel is just one of many ice cubes. Another obvious one is Volkswagen, the German automobile group, which is transitioning quickly into the manufacture of electric vehicles. In the process, it is helping to transform an entire sector that for decades has contributed to global warming via the manufacture of petrol engines.
A less obvious example is LafargeHolcim. Indeed, the world’s biggest cement producer could easily fall into the “excluded” categories of many popular approaches to sustainable investing. The built environment accounts for an estimated 40 per cent of the UK’s total carbon footprint, and it is a similar story in Europe and beyond.
But the Swiss cement and building-aggregates producer has already begun its stated journey down the pathway towards net zero. It has begun exploring greener building materials, carbon-capture technology and fuels derived from waste. By 2030, it expects to inaugurate its first carbon-neutral cement plant. It has pledged to become a net zero economy, working with the Science Based Targets initiative to define what the roadmap to get there will look like. The company is not quite there yet, but is beginning to move in the right direction.
“I will not stop pushing the boundaries on our net-zero journey with rigorous science-based targets,” says Jan Jenisch, the company’s CEO. “We are accelerating circular and low-carbon solutions to lead the way in green construction.”
The corporate winners and losers in the transition to net zero will inevitably come from a wide variety of sectors. But the biggest contributors to future reductions in carbon emissions are transitioning companies that reside in today’s unloved sectors. Understanding the transition trajectory companies are on allows us to identify which players are likely to come out on top – and allows us to help them get there.
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