Renewable energy named a key sector for western investors: survey

Dynamic markets need $95t to become net zero economies by 2060.

Over 2 in 5 investors (43%) named renewable energy as one of the three most important sectors in their current investment strategy, according to a survey of 400 European and American financial institutions by Standard Chartered.

A quarter of respondents (26%) said that renewable energy will be “the single most important sector in their future investment or development strategy.”

“The move to renewables is a really important source of deal flow in many markets now,” said Anne Hiebler, global head of M&A at Credit Agricole CIB, noting that multinational businesses are keen to position themselves.

“It’s a trend that applies globally – our clients’ transactions are increasingly influenced by sustainability issues,” she added.

These investments are vital as the rapid economic growth of dynamic markets is causing huge additional demand for energy, Standard Chartered noted.

These markets are estimated to need about $95t of new investment to become net zero economies by 2060, according to the World Economic Forum (WEF).

Dynamic markets refer to or high growth countries, such as India, Mainland China, the UAE and Brazil, that no longer qualify as ‘emerging’.

A 2021 report by the Council of Environment, Energy, and Water (CEEW) posits that 88% of the growth in global electricity demand between 2019 and 2040 is expected to come from so-called dynamic markets.

“But dynamic markets – excluding Mainland China – account for only around 15% of global investment in renewables. This underlines the need for more private sector investment to meet the opportunity in these markets,” said Steve Cranwell, CEO, US & Americas at Standard Chartered.

“There is a lot of private investment flowing into the US and Europe, and increasingly into the Middle East and Africa” says Steve Cranwell, CEO, US & Americas at Standard Chartered.