Investors who want to support the green energy transition strategically have a road map for climate solutions investing in a new report from the Institutional Investors Group on Climate Change.
The report, Climate Investment Roadmap: A tool to help investors accelerate the energy transition through investment and engagement, offers some of the most effective ways to direct capital.
Developed with support and analysis from strategic economics consultancy Vivid Economics, the report suggests 10 priority technologies to invest in: solar photovoltaic, or PV; wind; grid-scale electricity storage; new electricity lines; electric vehicle batteries; and strategic engagement activities to promote building retrofits, EV chargers, hydrogen-based electricity generation, forest restoration and green steel.
It also offers ways to get effective corporate disclosure to advance measurement of investors' contributions to net-zero, and methodologies for developing benchmarks that can help inform portfolio construction and track how assets contribute to net-zero emissions reductions.
The group is the European membership body for investor collaboration on climate change. It has more than 375 members, mainly pension funds and asset managers, across 23 countries, with more than €51 trillion ($56 trillion) in assets under management collectively.
"This report helps investors understand where their investment would have most impact on mitigating climate change," said Stephanie Pfeifer, CEO of IIGCC, said in a news release. "While investors alone do not shoulder the responsibility, we cannot escape the truth that we must see a rapid and significant step change in the amount of investment currently being channeled towards climate solutions if we are to reach net zero by 2050."
IIGCC is now working with FTSE Russell to apply the investment trajectories and metrics covered in the report to the listed equity market.
It will take an estimated $126 trillion of investment in climate solutions to meet the goals of the Paris Agreement, according to IIGCC.
