INSIGHT ISSUE 01 | 2021

22 Enabling the Digital and Energy transition Public investment will never be sufficient to fund the scale of the transition to net zero, so action to leverage private sector investment is essential. Governments are taking steps to ’green’ finance by mainstreaming climate and environmental factors and embedding them into core financial frameworks and regulation. A first step is to make disclosure of companies’ climate-related financial risks and opportunities to investors mandatory. This will accelerate the alignment of investment with net zero ambitions and position those industry sectors that take a lead at the forefront of global green finance. The impact investment market has also grown rapidly in recent years as investors increasingly allocate capital on the basis of both potential financial returns and the intention to generate positive societal and environmental impacts. The Science Based Targets Initiative (SBTi) has created a tidal shift in corporate climate ambition globally – with over 1,000 companies leading the net zero transition by setting emission reduction targets that are aligned with the Paris Agreement. The level of ambition that companies are setting for themselves within the SBTi framework has also been increasing – with an increasing number setting the most ambitious 1.5C-aligned decarbonisation target for their own operations (Scope 1 & 2 emissions) and wider value chain (Scope 3 emissions). These 5 to 15-year trajectories are aligned with long-term net zero goals, and many companies are now explicitly committing to net zero by 2050 or earlier. The technology and means to achieve net zero are currently not available at scale, as this will require significant deployment of carbon capture and storage (CCS) – whether bio-based or technological. However large-scale commitment to this ambition by businesses and industry sends a powerful market signal to innovators and financers of these solutions while, in meantime, driving down carbon emissions. " Prysmian is in a unique position, through its technology and solutions, to deliver the infrastructure enabling the decarbonisation of our economies." Aleyn Smith-Gillespie Associate Director, Carbon Trust Howwill finance adapt to the need for a more sustainable approach by companies? What do you think about the net zero goals pursued by companies?