Svolto di vicende nel cammino del cambiamento
In pursuit of a greener and more sustainable future worldwide, various initiatives are underway to finance transition operations that prioritize environmental preservation, social inclusion, and economic growth.
The Agence Francaise de Développement (AFD) meticulously examines each operation that falls within the broad sense of transition, evaluating it across six dimensions: biodiversity, climate change (adaptation and mitigation), social inclusion, gender equality, governance, and economic impact.
One such initiative is Vulcan Energy, a company reimagining lithium mining processes. Their plan is to build the world's first carbon-neutral, integrated lithium and renewable energy business. Vulcan's Life Cycle Assessment estimates a negative 2.9 tonnes of CO2 emitted per tonne of lithium hydroxide to be produced from their project.
The International Monetary Fund (IMF) estimates that the path to net zero by 2050 will require low-carbon investments to rise from USD 900 billion in 2020 to USD 5 trillion annually by 2030. Emerging and developing countries will require approximately USD 2 trillion of this investment, a fivefold increase from 2020 investments.
To ensure everyone is working towards the same goal, initiatives like Quantis' standardized and transparent database of avoidance factors are being developed. This database, operational from March 2025, aims to quantify, compare, and audit the emissions avoided by companies and projects, building on existing frameworks and disclosures.
In Europe, transition is increasingly being translated to carbon reduction. Schneider Electric, a pioneer in reporting avoided emissions, has set an ambitious target to deliver 800 megatons of avoided emissions over the period 2018-2025. The European Investment Bank (EIB) provided financing of EUR 200 million for the German government's biggest environmental project from 2013-2022, aimed at rehabilitating former lignite mining sites in Brandenburg. With production in Germany and the end product being supplied to EV and battery producers in Europe, the entire supply chain will be just 130km long, drastically reducing potential impact and resulting in avoided emissions of 1.3 million tonnes per year.
The financing of this project is the first green enabling loan (compliant of the ICMA recently published guidelines) with CIB as the Green coordinator. Schneider Electric was one of the first companies to begin reporting avoided emissions publicly and has been reporting on the metric since 2015.
The task of financing transition is not without its challenges. Subject to the CSRD, data collection is a challenging topic, as in many emerging markets, it's difficult to collect the data required, as it is often not produced. To combat this, financial institutions need to be vocal about what they are doing, and how they are financing transition, providing a gap analysis on what green means for an emerging market versus what green means in Europe.
On a global scale, initiatives like Brazil's taskforce on climate change during its G20 presidency are making a significant impact. The taskforce, with a mandate to address what is necessary to stay below 1.5 degree of change, in terms of action and financing, particularly excelled in sending a clear political signal for the first time regarding the consideration of bringing forward climate neutrality commitments among the G20 countries.
However, there is a huge disparity on views of what transition is, and the pathways for each country. To ensure nuance and differentiation start trickling down into methodology, it is crucial that all stakeholders work together towards a common goal: a sustainable and equitable future for all.
Justine Leigh-Bell, from the fixed income market, states that this market is powerful and has a significant role to play, with USD 130+ trillion at play. Opening capital flows to emerging market countries is where the greatest impact will take place.
In conclusion, the transition to a sustainable future is a global effort that requires cooperation and innovation from all sectors and regions. Initiatives like those mentioned above are leading the way in financing and implementing transition operations that prioritize environmental preservation, social inclusion, and economic growth. As we move forward, it is crucial that all stakeholders work together towards a common goal: a sustainable and equitable future for all.
