The Paris climate agreement has finally officially gone into effect, with the goal of limiting the global temperature rise well under 2 degrees Celsius. Experts think it’s only going to take a $17 trillion investment by 2030 to get there.
But banks are buying in. Around $400 billion was invested in climate technology last year, a big jump compared to previous years. Why? Because it’s starting to make more and more sense from a business standpoint.
French bank BNP Paribas significantly altered its business model at COP21 in Paris. With 40 percent of the world’s energy currently coming from coal, that number must be cut in half in 20 years to stay within the 2 degrees goal. BNP laid out a plan to reduce its funding of coal by 50 percent in the next 20 years, while at the same time doubling its investment in renewable energy.
Italian multinational utility, Enel, plans to invest 9 billion euros over the next five years into renewable energy projects. It promises to deliver at least 60 renewable energy projects over the next two years while also decommissioning over 20 fossil fuel power plants.
“Renewables are today the best solution to provide fast energy in the best way and at a low cost,” said Enel head of sustainability, Andrea Valcalda. “From a utility perspective, we are in the middle of an energy transition. It is a great challenge but also a great opportunity if you are brave enough to see the new model and to rethink completely and drastically your plan and the way you invest.”
The conversation will move from theory to implementation at COP22 in Morocco, and hopes are high the buy-in from investors will continue.