Perspectives
11 September 2023
Over the last 20 years, the finance industry has helped establish the renewable energy sector as the greatest decarbonisation success story to date, with annual investment in the sector growing from $US32 billion in 2004 to $US495 billion in 2022.1 During that period, renewable energy costs have fallen sharply, helping solar and wind become key contributors to energy supply and a mainstream asset class for institutional investors globally.
Decarbonisation efforts have now spread to more sectors, spurred by increasingly ambitious government climate targets to reach net zero emissions by 2050. To reach these targets, however, the achievements made to date in the renewable energy sector need to be replicated in scaling up the technologies critical to supporting the next phase of decarbonisation. To scale these more nascent solutions, businesses will need to build expertise and make significant investments to upgrade or retrofit their operations, especially in carbon-intensive sectors2 like oil and gas and heavy industry.
Finance must work hand in hand with these sectors to accelerate the development, de-risking and scale up of the required technologies.
Partnerships have been part of our approach at Macquarie and in this paper we set out the importance of working together to accelerate the decarbonisation of the economy.
There are many pathways to decarbonisation, especially for carbon-intensive sectors. Choosing the right one can be difficult, which is why partnerships are vital – partners are able to tap into each other’s knowledge and expertise, helping them pick the best solutions.”
Kate Vidgen
Head of Industrial Transition and Clean Fuels
MAM Green Investments
Macquarie Asset Management
Macquarie recognises the science on climate change and the widespread disruption it is causing. We believe that we can contribute positively to the challenges and opportunities of climate change mitigation and adaptation through the financing of practical solutions driven by our core capabilities. We also believe that the transition must be managed and orderly, which is why we are actively supporting carbon intensive industries to reduce their emissions and continuing to work with oil and gas companies, in recognition that much of the world will depend on these industries for years to come.
