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Net Zero Emissions: A Global Focus on Climate Change Signals Investment Potential

2 Min Read

Currently our world is 1.1°C (33.98°F) warmer than it was in the late 1800s. This may not seem like much, but the steady growth in rising environmental temperatures is significant.

To stop this trend from continuing to climb, emissions need to be cut by 45% before 2030 to reach net zero emissions by 2050.

Innovation in solar, wind, electric, and hydrogen power moves us closer to the global goal of reducing emissions to net zero.

Since the Paris Agreement, accountability standards have been raised with increased commitment from private and financial sectors, and local and regional governments.

There are five industries producing the largest amount of greenhouse gas emissions. They have the unique opportunity to significantly decarbonize and move the needle by reducing overall greenhouse gas emissions by 25% in 2025 and 45% in 2030.

Top Industry Sectors

Global Power: Renewable energy sources such as coal, natural gas, solar, and wind power are economically competitive and primed to meet demand. The shift away from fossil fuels would garner over a 35% reduction in emissions. Both factors present interesting PE investment opportunities.

Oil & Gas: With new exploration in power source technologies, such as hydrogen, oil and gas companies are well-positioned to have a meaningful impact in emissions reduction.

Automotive: Electric vehicles account for 15% emission reduction compared to combustion and diesel engines. Charging and hydrogen fueling innovations, new supply chains, and manufacturing capacity growth presents a unique emerging niche in PE investing.

Aviation & Shipping: Clean fuel adoption in these sectors of the industry with a move toward green hydrogen and biofuels is projected to meet around 15% of the U.S. energy demand.

Steel: Green steel is made using fossil-free energy, therefore it does not create CO2 emissions. With traditional steelmaking accounting for 7% of global emissions, this is the most significant industrial polluter. Steel companies and customers are embracing the shift toward green steel manufacturing, promoting growth, and adoption.

Investor Insights

There has been a trend in private equity thesis building around electricity and renewable energy including:

  • Industrial services and transitioning the U.S. to green energy and becoming carbon neutral
  • Clean energy built on solar tech and battery storage capacity
  • Electrification solutions for infrastructure and renewable energy

Consider investing in this diverse global industry.

To explore more net zero trends and to build a private equity thesis in the field of renewable energy, contact Apex Leaders to meet with a private equity advisor experienced in this sector.

For a livable climate: Net-zero commitments must be backed by credible action
The Paris Agreement
Credibility and Accountability of Net-Zero Emissions Commitments of Non-State Entities
Decarbonizing the world’s industries: A net-zero guide for nine key sectors