The transition to a net-zero emissions world will have an enormous, but uneven, impact across economic sectors. Here, J.P. Morgan Asset Management’s research analysts share with ESG Clarity views on how the transition to net zero will impact some of the industries that will undergo the greatest changes.
Conclusions
Hugh Gimber, global market strategist
There is an unavoidable conflict between the desire to increase energy security and to reduce emissions, as evidenced by the level of gas-to-coal switching that has been triggered by the surge in natural gas prices. That said, looking beyond the very near term, this conflict will ultimately turbocharge the net-zero agenda. Numerous policy announcements have already been made that look to accelerate the rollout of renewables across Europe, and more will inevitably follow.
As the research analysts have highlighted above, the path to net zero will have ripple effects across not only all parts of the economy, but also the financial markets. Regardless of the industry under consideration, companies that can prove they are part of the solution to tackling climate change stand to benefit from both new environmental initiatives and increasing investor pressure. A thorough understanding of how the wave of policy changes ahead will impact cash flows and valuations should be an essential part of any investment decision today.
