From the desk of
Doug Couden, CFA
With companies and investors increasing their public commitments to sustainability related goals, the transition process presents the opportunity for investors to help enact real change. However, meeting these goals means different things for different sectors and different companies - some will need to fundamentally change what they do and how they do it, while others can achieve their targets with more modest shifts.
From Concept to Reality: The Next Phase of the ESG Transition Is Here
Although moving to a more sustainable future is clearly desirable and presents an array of investment opportunities, transition does not come for free and the question of who should bear that cost sits largely unaddressed given the intersection of government and corporate policies. For investors, there is also the question of whether it is better to invest in sectors (and companies) that are more advanced in their transition process or those that are just starting out given the costs and potential return trade-offs involved.
Chief Investment Officer,
The Global Power Grid:
Preparing for Net Zero
The biggest hurdle to achieving net zero is the expansion and improvement in the global power grids. With expected energy consumption to double in the US and Europe in the coming years, the grid infrastructure will need to undergo significant transformation that favor wind, solar, and hydro sources. Generation, transmission, and distribution aspects will likely require location-specific solutions.
Sources: Jeffreis, US Department of Energy - Office of Electricity Delivery & Energy Reliability, BakerAvenue. As of 9/12/2023.
Sources: Jefferies Research, US Energy Information Administration (EIA), BakerAvenue. As of 9/12/2023.
America's Power System Comprises Four Distinct Power Grids
60% of Electricity Generation Is from Fossil Fuel Sources in the US Grid Today