The Paris Agreement in 2015 drew a line in the sand for everyone concerned with environmental and sustainability concerns. It’s where many business leaders finally awoke to the financial risks of climate change. And it’s largely why supporting the energy transition to a low carbon world has since become a priority for governments and corporations globally.

The energy transition describes the transformation of the global energy sector from fossil-based systems of energy production and consumption to renewable energy sources. Switching from non-renewable energy sources like oil, natural gas, and coal to renewable energy, such as wind or solar, is made possible by technological advancements and a societal push toward sustainability.

Russia’s invasion of Ukraine dialled the wake-up call to European leaders when it comes to energy supplies, while energy market volatility continues to pose vexing questions about striking the right balance between long-term transition goals versus near-term energy security. Across the Atlantic, meanwhile, the climate, tax and healthcare bill – or ‘Inflation Reduction Act’ – represented the most significant climate legislation ever enacted in the US.

Increasingly, the spotlight is on sustainable finance to provide solutions that will help to accelerate the energy transition. And the good news for investors is that there are a number of ways they can help to finance a radical transformation of the energy mix.

Green bonds, for example, are arguably one of the best fixed income vehicles available to accelerate the low-carbon transition. The proceeds of green bond issuance go towards financing projects that contribute positively to the environmental and energy transition. This includes the development of zero-carbon mobility, energy renovation of housing and public or private commercial buildings, or the development and storage of renewable energy.

Sustainable equity, too, presents a long-term opportunity for investors. Fossil fuels will continue to play an outsize role in energy markets, even if green alternatives come online faster than expected. Yet companies that are part of the transition – those involved with wind, solar, energy storage, nuclear, hydropower and biomass – make a strong investment case.

Moreover, as biodiversity loss joins climate change as one of the most pressing global systemic risks, increased innovation is required across multiple asset classes to finance nature-based solutions for oceans, forests, and agriculture – from energy transition and infrastructure programmes to private equity and blended finance projects.

3 minutes with… Nathalie Pistre, Ostrum

Find out how Ostrum’s Nathalie Pistre began her journey in sustainable investing and what keeps her motivated as Head of Research & SRI.

November 9, 2023
3 minutes with… Nathalie Beauvir-Rodes, Ostrum

Find out how Ostrum’s Nathalie Beauvir-Rodes began her journey in sustainable investing and what keeps her motivated as Head of Sustainable Bond Research and Analysis.

October 31, 2023 Financial Professional content – requires login
3 minutes with… Mathilde Dufour, Mirova

Find out how Mirova’s Mathilde Dufour began her journey in sustainable investing and what keeps her motivated as head of sustainability research.

September 22, 2023
3 minutes with… Jens Peers, Mirova

Find out how Mirova’s Jens Peers began his journey in sustainable investing and what keeps him motivated as a portfolio manager.

February 27, 2024 Financial Professional content – requires login
Supply Chains and Sustainability

The next decade will see technology enable us to replace our dependency on certain critical materials and redefine supply chains so that electrification opportunities are enhanced all over the globe, says Mirova’s Jens Peers.

August 8, 2023
3 minutes with… Agathe Foussard, Mirova

Find out how Mirova’s Agathe Foussard began her journey in sustainable investing and what keeps her motivated as a portfolio manager.

June 28, 2023 Financial Professional content – requires login
Engaging Companies for the Long Term

With investors increasingly wary of greenwashing, Mirova’s Soliane Varlet says engagement is the path to more transparency and a more sustainable future.

May 31, 2023 Financial Professional content – requires login
Views from the Collective: Where Next for Sustainable Investing?

For sustainable investors, navigating the regulatory and political landscape has become a real challenge in recent years. What does the future hold?

May 22, 2023
How to Invest in Biodiversity

While COP15 paved the way for new regulations, achieving zero biodiversity loss by 2030 requires a concerted effort among investors and consumers alike.

May 8, 2023 Financial Professional content – requires login
Markets and Motivations for Green Bonds

In 2022, green bond volumes fell year-on-year for the first time in a decade. Mirova’s Bertrand Rocher and Agathe Foussard explain why 2023 looks brighter.

May 11, 2023
How Green are Green Bonds?

Not all green bonds are created equal. Thankfully, some managers will only invest in an issuer if the impacts are sufficiently clear and achievable.

March 9, 2023
All Aboard the Energy Transition?

With governments now coming aboard the energy transition train, investment opportunities abound in the shift from fossil fuels to cleaner alternatives.

December 9, 2022
Should You Pay More for Green Bonds?

Is it really worth paying a premium to issuers of green bonds over conventional bonds? And which factors might catalyse this ‘greenium’ in the future?

January 1, 2023

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