2021-10-31-瑞士信贷集团-ESG研究_COP26及以后的投资者指南_95页_3mb

Summary of "Global ESG Research: Investors' Guide to COP26 and Beyond"

Core Content

The document outlines the key themes and investment opportunities emerging from the COP26 climate summit and beyond, emphasizing the need for stronger climate commitments, increased financial support for developing countries, and the role of carbon pricing mechanisms in achieving global decarbonization goals. It also highlights the importance of sector-specific policies and the acceleration of corporate climate action, particularly in the power, transport, buildings, and industry sectors. Additionally, it presents a list of 60 high-conviction decarbonization investment ideas across North and South America, Europe, and Asia.

Main Focus Areas at COP26

1. Escalating Ambitions and Action Plans

   • Over 73% of global GHG emissions are from countries that have submitted or proposed stronger net zero targets.
   • Current climate commitments suggest a warming of 2.0℃, but existing policies imply a warming of 2.6-2.9℃ by 2100.
   • Key countries to watch: China, US, India, EU, Russia, and Japan.
   • Expectations are tempered due to the absence of Chinese and Russian Presidents and India's lack of net zero pledges.
   • The G20 pledges to stop funding foreign unabated coal-fired plants.

2. Mobilizing Climate Finance

   • $100 billion/year in climate finance is needed for developing countries, but only ~$80 billion is currently mobilized.
   • Financial institutions are increasingly committing to net zero goals, with ~40% of global AUM in net zero investment portfolios.
   • Banks responsible for ~42% of global assets have pledged to achieve net zero financed emissions.

3. Global Carbon Pricing Mechanisms

   • Only ~22% of global GHG emissions are currently covered by carbon pricing.
   • Carbon prices need to reach $130/ton by 2030 and $250/ton by 2050 in advanced economies.
   • Progress on Article 6 of the Paris Agreement, carbon border adjustments, and voluntary offset markets is critical.

Key Stock Ideas for a Post-COP26 World

The report highlights 60 Outperform-rated companies across key regions, covering a wide range of decarbonization themes:

North and South America

• Air Products & Chemicals: Hydrogen, Carbon Capture
• Allegro Microsystems: Transport Energy Efficiency
• Aemetis: Advanced Biofuel
• Analog Devices: Multi-theme enabler
• Aptiv: Transport Energy Efficiency
• Aramark: Sustainable Food
• Chart Industries: Hydrogen, Carbon Capture
• CPFL Energia: Hydro, Wind, Biomass, Solar
• Crown Holdings: Circular Economy
• Deere & Co: Sustainable Agriculture
• Johnson Controls: Building Energy Efficiency
• Northland Power: Wind
• Nomad Foods: Sustainable Food
• NXP Semiconductors: Multi-theme enabler
• Quanta Services: Green Infrastructure
• Raizen: Advanced Biofuel
• Sunrun: Solar
• TransAlta: Renewable Energy

Europe

• Air Liquide: Hydrogen
• Alstom: Green Infrastructure
• ASML: Multi-theme enabler
• Bureau Veritas: Multi-theme enabler
• Koninklijke DSM: Sustainable Food
• EDP: Renewable
• E.ON: Green Infrastructure
• Enel: Solar, Wind, Hydrogen
• George Fischer: Transport Energy Efficiency, Green Infrastructure
• JMAT: Hydrogen, Energy Storage
• Kingspan: Building Energy Efficiency
• Nexan: Offshore Wind / Electrification
• NKT: Offshore Wind / Electrification
• OCI NV: Hydrogen
• Schneider Electric: Building and Industrial Energy Efficiency
• Siemens: Building and Industrial Energy Efficiency
• Sika: Building Energy Efficiency
• SKG: Circular Economy
• SSAB: Green Infrastructure

Asia

• Airtac International: Energy Storage
• Azure Power Global: Solar
• BYD: Transport Energy Efficiency
• CATL: Battery
• Centre Testing: Carbon Certification
• China Everbright: Circular Economy
• China State Construction International: Building Energy Efficiency
• Chroma ATE: Transport Energy Efficiency
• CK Infrastructure: Green Infrastructure
• Dongyue: Hydrogen

Key Sectors and Their Climate Policy Focus

Power Sector

• Need to phase out coal by 2030 and achieve 100% clean power by 2035 in advanced economies.
• Government mandates and incentives are crucial to accelerate the transition to renewables.
• Advanced economies are expected to lead the way, with emerging economies following 5-10 years later.

Transport Sector

• Electrification of road transport is closest to achieving net zero.
• 100% EV for light-duty vehicles (LDV) by 2035.
• Heavy-duty (HDV) transport may see more stringent fuel efficiency regulations.
• Aviation and marine shipping are also seeing momentum toward net zero by 2050.

Buildings Sector

• Inertia in existing buildings and inconsistent government policies are challenges.
• Need for building energy performance standards and incentives for retrofits and heat pump adoption.
• ~85% of existing building stock is expected to be retrofitted by 2050.

Industry Sector

• Least regulatory pressure but energy/material efficiency is gaining steam.
• Incentives for carbon capture and hydrogen are needed to accelerate decarbonization beyond 2030.

Agriculture and Forestry

• Methane regulations and the development of voluntary carbon offset markets are key to advancing natural-based solutions.
• Companies that reduce methane emissions from cattle or develop sustainable agricultural practices are in focus.

Methane

• Growing support for the Global Methane Pledge to reduce emissions by >30% by 2030.
• Focus on oil & gas and agriculture sectors.

Key Investment Themes

• Hydrogen: A major focus with growth potential in energy storage, fuel cells, and industrial applications.
• Transport Energy Efficiency: Includes EVs, battery technology, and automation solutions.
• Sustainable Food: Companies developing plant-based alternatives, reducing food waste, and improving packaging sustainability.
• Green Infrastructure: Covers renewable energy, carbon capture, and circular economy solutions.
• Multi-theme Enablers: Companies that support multiple decarbonization sectors through technology and innovation.
• Carbon Certification and Offsetting: Critical for transparency and accountability in emissions reduction.

Conclusion

COP26 is a pivotal moment in the global climate agenda, but the real challenge lies in the execution of existing pledges and the development of robust policy and financial frameworks. Investors should focus on companies that are actively transitioning to sustainable practices, leveraging carbon pricing mechanisms, and aligning with sector-specific regulations. The report underscores that while public commitments are essential, the private sector will play a key role in driving the transition to net zero through innovation, capital allocation, and operational changes.