When Vaitheeswaran asked panelist Kara Mangone ’14, global head of climate strategy at Goldman Sachs, about her assessment of the climate investing landscape, she offered a hopeful one: “I think the headline answer to your question is that we're really in execution mode now,” said Mangone. “That’s the positive takeaway I would offer from this week in Sharm el-Sheikh.”
She noted that at this year’s COP and those previous, many businesses had made net zero pledges, following the lead of country commitments representing more than two-thirds of global GDP. That creates a demand for low-carbon solutions: “The work that’s being done now is really rolling up our sleeves and funding and investing in the areas that we need to,” she added.
This is precisely what panelist and CBS alumna Nili Gilbert ’03 is working on as vice chairwoman at Carbon Direct, a carbon management company dedicated to making climate science actionable through two separate businesses: the first assists clients (mainly companies and municipalities) with their decarbonization goals, and the second invests to build up the industry of companies that can help them do so.
Gilbert explained how the Glasgow Financial Alliance for Net Zero, where she chairs the advisory panel of technical experts, has identified four key types of financing for the transition to net zero. The first might be thought of as the low-hanging fruit — investing in the assets that are already part of the net-zero world (like solar and wind). The second is investing to transition the assets that can be transitioned over time along a 1.5-degree pathway (in other words, the assets that have been pledged to net-zero and the ones remaining to do so). The third is appropriately managing out the assets that simply can’t be part of a net-zero world, like coal. Finally, the fourth category is investing in climate solutions that eliminate, reduce, or remove GHG emissions, including zero carbon alternatives to high-emitting assets (for example, green hydrogen and carbon capture and storage).
“I looked at the problem set and realized that, if right now we have four parts of this portfolio today, then by 2050 it needs to come down to just two parts – because everything that can be transitioned will eventually be transitioned in a net zero world, and everything that needs to be phased out will be phased out,” Gilbert said. “When you look at it this way, you realize just how big the already-net-zero and the climate-solutions areas will need to become. That's why I’m so passionate about Carbon Direct, where we work on investing in and bringing to commercial scale the climate solutions field.”