Green Investing: Low Carbon Energy Infrastructure

The World Economic Forum says that moving to a low-carbon energy infrastructure will require global annual investment of around US$ 500 billion, if the increase in global average temperatures is to be restricted to 2°C, while General Electric ranks first on the  sixth annual Global 100 list of the most sustainable firms, released in Davos.

Davos-Klosters, Switzerland, 28 January 2010 − In a report released today, entitled Green Investing 2010: Policy Mechanisms to Bridge the Financing Gap, the World Economic Forum reveals that investment in clean energy has held up better than expected during the financial crisis and resulting recession, but a considerable gap still exists between current levels of investment and what is needed to begin reducing the world’s carbon emissions.

In another report, Green Investing: Towards a Low Carbon Energy Infrastructure, the World Economic Forum stated that moving to a low-carbon energy infrastructure will require global annual investment of around US$ 500 billion per annum, if the increase in global average temperatures is to be restricted to 2°C.

Investment in 2009 was remarkably resilient at US$ 145 billion, down only 6% from US$ 155 billion in 2008, as the shortfall created by the financial crisis was largely filled by the launch of green stimulus initiatives around the world. In addition, the Copenhagen Accord, which was noted by the participants at the COP meeting in December 2009, contained a commitment by developed countries to invest US$ 100 billion in developing countries. While the next few years are likely to see record investment activities, a significant financing gap of US$ 350 billion still exists. To unleash adequate funds to bridge this gap, appropriate policy mechanisms are required.

The report’s authors, Anuradha Gurung and Max von Bismarck from the World Economic Forum, and Chris Greenwood and Michael Liebreich from New Energy Finance, state that “as a result of the continued financing gap, there is an urgent need for policy-makers around the world to implement measures at the regional, national and sub-national level, which will encourage investment in clean energy technology and projects. With this in mind, the report provides policy-makers with a toolkit consisting of 35 different policy mechanisms, which can be used to promote various clean energy sectors. The mechanisms can be chosen based on stage of technological development – R&D/proof of concept, demonstration and scale-up, commercial roll-out, diffusion and maturity – and also on stage of economic development.”

Policy mechanisms have to be tailored in the national, state and local context. Mechanisms for a financially viable shift to a low-carbon economy range from the establishment of national laboratories or research centres; requiring public entities to  procure clean energy or use emerging efficient technologies; programmes designed to reduce the cost of private lending and improve project economics; and microfinance.

A new set of ratings are used to evaluate the policy mechanisms and is based on how well they are likely to perform on three key criteria: whether they scale; whether they are economically efficient; and the extent to which each dollar of cost to the public purse catalyses private investment.

“The world needs a substantial increase in private investment flows into clean energy and energy efficiency if we want to avoid severe impacts of climate change,” said Jack Ehnes, Chief Executive Officer, CalSTRS, and Member of the Expert Committee. “This report not only lays out key opportunity sectors for private investors but also identifies very concrete tools for governments to bridge the climate investment gap.”

This year’s report provides an up-to-date description of 10 emerging, large-scale clean energy sectors that will form part of any low-carbon energy system of the future. It also describes the four key enablers that are required if these clean energy sources are to be integrated into the existing infrastructure: smart grids, power storage, advanced transportation and carbon, capture and storage. Given the importance of energy efficiency in moving to a more sustainable energy mix, the report also includes a separate chapter on energy efficiency.

The report is the result of a year-long collaboration between the World Economic Forum and Bloomberg New Energy Finance.

Close to 30 public and private sessions explore climate change and low-carbon economic growth issues at this year’s World Economic Forum Annual Meeting in Davos-Klosters. Topics range from industry-focused discussions on scaling up green investing, energy efficiency, smart grids, and carbon capture and sequestration demonstrations, among others, through to business conversations with governments and expert organizations on the broader policy environment that is most useful to focus the private sector on green growth following the outcomes of the Copenhagen Climate meeting in December.

One particular area of discussion at this year’s Annual Meeting involves the design of a high-profile platform involving international organizations, multilateral financial institutions and investor networks, with an aim to launch innovative mechanisms for financing low-carbon energy infrastructure in developing countries in 2010.

Source: www.weforum.org

By GreenBiz Staff (29 January 2010):

DAVOS, Switzerland — General Electric Company, the PG&E Corporation and Tnt Nv, an international express and mail delivery service based in the Netherlands, rank first, second and third place respectively on Corporate Knights magazine’s sixth annual Global 100 list of most sustainable firms.

The magazine released the roster for 2010 on Wednesday at the World Economic Forum’s conference in Davos, Switzerland.

This year’s list of 100 companies hail from 24 countries, employ about 3 million people and represent a collective value $4 trillion.

The United Kingdom is home to the greatest number of companies on the list. It is the headquarters for 21 this year and had 20 companies on the list in 2009. Twelve firms are based in the U.S. this year, compared with 20 last year. The next highest number of companies are based in Canada and Australia, which each have nine this year. Overall, 50 percent of the firms that made the cut in 2009 are on the list for 2010.

The top 10 firms this year are:

GE

PG&E Corp.

TntNV

H & M, Hennes & Mauritz, of Sweden

Nokia Corporation of Finland

Siemens Ag of Germany

Unilever Plc of the United Kingdom

Vodafone Group Plc of the UK.

Smiths Group Plc of the U.K.

Geberit of Switzerland

Corporate giants that rank among the leading 20 companies in the Global 100 include Henkel Ag of Germany (at No. 11), which was on the top 10 list recently compiled by green mutual fund group Portfolio 21; U.S. firm Procter & Gamble (No. 13); Japan’s Toyota Motor Corp. (14); Koninklijke Philips Electronics (17) of the Netherlands, better known simply as Philips; and Shell, or more formally, Royal Dutch Shell Plc of the U.K.

The firms were culled from a pool of 3,000 global stocks and reviewed against 11 metrics to qualify for inclusion among the top 100 this year.

The performance indicators were:

Energy, carbon, water and waste productivity — ratios of sales to total direct and indirect energy consumption, total carbon dioxide and carbon dioxide equivalent emissions, total water use and total waste produced, respectively;

Leadership diversity, which was gauged by the percentage of women on a company’s board of directors;

A comparison of the highest paid executive’s compensation to average employee compensation;

The percentage of total reported tax obligation that was paid in cash;

A score for sustainability leadership that was based on whether the firm has a sustainability committee and whether a director is part of the group;

Sustainability remuneration, which was determined by whether at least one senior officer’s pay is linked to sustainability;

Innovation capacity, expressed as a ratio of R&D and sales; and

Transparency, which was measured by the percentage of data points for which the company provided information and its level of GRI disclosure.

GE, whose businesses to foster and focus on sustainability are embraced by its ecomagination line, went to the top of the list with an array of high scores. They included $729,685 in sales per tonne of waste produced, which placed the company in the 89th percentile among firms in the capital goods industry group.

Almost a quarter of GE’s directors are women. In addition, the firm doubled its carbon productivity from 2006 to 2008 by cutting total carbon emissions from 10.8 million tonnes to 6.5 million tonnes, while increasing sales from $150 billion to $181 billion.

The full list of Global 100 companies and details about their rankings are available at http://global100.org/

Source: www.greenbiz.com