UBS: "Green Hockey Stick" Signals Carbon Reduction Solutions
UBS, a global wealth management firm, has published a report on the growth and potential of climate technologies.
The research highlights the need to bridge the gap between ambitious sustainability goals and economic realities, analysing key areas like renewable energy, resource efficiency and financial investment.
UBS’s report says that sustainability isn’t just a challenge for governments and businesses, but an opportunity for financial institutions to lead in building a greener economy.
UBS’s focus is to advance sustainability through strategic investments that align with global climate targets, aiming to play a pivotal role in reducing environmental impact while fostering long-term economic growth.
The UBS report says: “Sustainability technologies that drive down resource consumption and emissions need to scale by becoming ‘better’ than current practices across performance, cost, and availability.”
With this vision, UBS’s sustainability strategy aligns with the broader goal of creating more equitable, efficient economies that prioritise resource conservation and emissions reductions.
Accelerating the green transition
UBS’s recent data shows that the green transition is accelerating.
In 2023, renewables accounted for an impressive 87% of all new global power capacity, showcasing how quickly markets can shift towards sustainable options when price equivalence is achieved.
UBS’s strategy includes:
- Identifying and advancing projects in sectors like renewable energy
- Green infrastructure
- Sustainable manufacturing
To fast-track this process, UBS endorses “small tent” sustainability strategies that target specific technologies or initiatives.
These strategies aim to concentrate resources and expertise, accelerating promising sustainability projects to reach commercial viability and providing a model for effective change.
This approach aligns with UBS’s commitment to support a practical and accelerated transition to a low-carbon economy – tackling sustainability challenges in more targeted, resource-efficient ways.
Addressing the capital gap
One of UBS’s key findings is the funding disparity that threatens progress towards sustainability goals.
While early-stage sustainability projects often attract venture capital and mature projects appeal to institutional investors, projects in the mid-development phase often struggle to secure capital.
By developing new financing models and attracting impact investors, UBS hopes to ensure that promising sustainability solutions aren’t stalled due to lack of funding.
UBS’s report says: “Financial innovation will prove key to ensuring capital avoids becoming a bottleneck on deployment in the same way infrastructure is today,”
How UBS will measure impact
UBS’s sustainability ambitions go beyond financial commitment; they include tracking and measuring the impact of investments to ensure alignment with environmental goals.
Setting benchmarks for sectors like renewable energy, energy efficiency and sustainable agriculture, UBS aims to make measurable progress toward lowering global carbon emissions.
Targets include helping to deploy 15 key sustainability initiatives that could deliver approximately 70% of the emissions reductions required to meet 1.5°C climate targets – involving major investments and partnerships across multiple industries.
UBS’s strategic approach prioritises solutions on the verge of breakthrough, recognising that supporting these near-mature initiatives is one of the most efficient ways to make substantial progress toward global sustainability goals in the near term.
By focusing on targets that address both economic and environmental priorities, UBS seeks to lead the financial sector in fostering a sustainable future.
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