Sara Patel
TLDR:
- “Transition finance” is a term used to describe industries and infrastructure that promote a net-zero economy.
- Fossil fuel companies are creating their own strategic plans for transitioning to renewables, and investors with sustainable mandates are feeling positive.
- Transition finance can be unsettling as it allows investments to support both renewable energy companies and companies with high levels of climate pollution.
- Transition finance is a result of geopolitical situations and aims to ensure a sustainable energy supply.
- The Glasgow Financial Alliance for Net Zero (GFANZ) has designed an investment strategy that embraces financing of traditional green activities, polluting companies that plan to decarbonize, and even coal plants on their way to decommissioning.
- Looking forward to 2024, credible transition plans will need to guide financial institutions and their stakeholders as they voluntarily transition their activities and portfolios in line with climate goals.
- GFANZ predicts that more capital will flow to companies providing solutions and driving progress as transition finance planning becomes more common.
If you’re like so many people in the world, you’re concerned about the climate crisis. If you are also an investor, then you should keep your attention on transition finance. “Transition finance” is a new term that’s being tossed around to describe industries and infrastructure that promote a net zero economy…
