NZAOA calls on policymakers to unlock £275trn net-zero investment opportunity

Written by Adam Cadle

25/09/2023

The UN-Convened Net-Zero Asset Owner Alliance (NZAOA) is calling on policymakers to boost support and unlock up to $275trn in climate investment opportunities by 2050.

In its new discussion paper, Unlocking Investment in Net Zero, the NZAOA said there are many “grace risks” associated with the failure to transition, including up to $4-6trn in GDP losses per year by 2050.

The NZAOA said key political barriers to the net-zero transition include a lack of public and private investment in infrastructure such as grid upgrades and public chargers for electric vehicles. Furthermore, the Alliance sets out solutions to the adoption of new technologies, such as financial support in the form of subsidies, grants and tax credits, that can be used to improve the risk/return profiles of investments, upgrade public infrastructure and increase sourcing capacity, as well as phasing out government support for brown assets.

Günther Thallinger, board member, Allianz SE and chair, NZAOA, said: “As we have learnt from advanced climate solutions, such as renewable energy and vehicle electrification, advantageous policy environments are a key enabler of uptake. Public subsidies and incentives for electric vehicles, for example, doubled from 2021 to 2022 to about $30bn globally, and we’re seeing similar trajectories for renewable energy and heat pumps.

“We must see these approaches replicated to similarly drive emergent technologies, such as green hydrogen and sustainable aviation fuels, without which it will be impossible to reach net-zero given the scale of the transition. Asset owners have a huge role to play, with potential contributions up to $31trn by 2050, but only by removing current investment barriers will we be able to unlock the full potential of private capital.”

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