ESG and the Energy Transition Debate

From Zero to Hero?  How EVs may help to save the Planet!

As the world rushes to adopt Energy Transition strategies, much of the focus is on the transportation sector, which produces about 20% of the world's greenhouse gas emissions, as a critical contributor to the problem. Electric Vehicles (EVs) feature as one of the more widely accepted solutions. However, the road to full-scale EV implementation has a range of potential potholes to avoid. From mine to end-of-life disposal, significant hurdles exist in the Lithium-ion cycle. Traceable, ethically sourced minerals, battery efficiency, and the infrastructures associated with both battery recycling and EV charging points are amongst the issues which still need addressing.

Notwithstanding implementation obstacles, a significant part of the Energy Transition conundrum remains the world's (over) reliance on fossil fuels as sources of electricity generation. While renewable capacity is increasing quickly, will it be fast enough, and how do 'legacy' utility companies effectively manage the transition? Is nuclear power a viable option for Emerging Economies? Savvy Investor has collated the best recent investment whitepapers that help to inform the debate about Energy Transition.

 

ESG AND RESOURCE ISSUES

Is there any green under the hood? Energy transition metals (Candriam, 2019)

For compliance reasons, this paper is only accessible in the UK & Europe

Candriam investigates the pivotal role that both the transportation and energy sectors need to play in any sustainable energy transition. They go on to explore what role a number of various metals might have in the progression to a ‘greener’ world.

EROCI and the Tough Road Ahead for Oil (BNP Paribas AM, 2019)

In this report from BNP Paribas AM, they introduce the concept of the Energy Return on Capital Invested (EROCI), and suggest that as renewables become even cheaper, oil would need to be priced at USD $10-$20 a barrel to remain a competitive fuel source for cars and light duty vehicles (LDVs).

It's Not Easy Being Green: The Future of Fossil Fuels (Wells Fargo, 2019)

Wells Fargo predicts that by 2050, the world's predominant fuel sources will still be fossil based.

Modern Slavery: The True Cost of Cobalt Mining (Hermes IM)

For compliance reasons, this paper is NOT accessible in the United States

The darker side to one of the key resources required to help the energy transition process is investigated by Hermes.

Are electric utilities’ governance and strategies fit for the energy transition? (Robeco, Oct 2019)

Robeco and Lyxor discuss the results of their engagement process with the nine electric utilities companies located in the US and Europe with the largest carbon footprints.

ENERGY TRANSITION IN EMERGING MARKETS

EV Development in Emerging Markets (BNP Paribas AM, 2019)

BNP Paribas AM explores how advanced EM countries, particularly China and India are in their development and integration of Electric Vehicles (EV), discuses some of the challenges and outlines potential benefits of EV adoption when accompanied by a shift to renewable power generation.

Energy transition in the world's fastest growing economies (BloombergNEF, 2018)

In this joint report from Bloomberg/NEF, they analyse some of the trends, challenges and opportunities that exist for Developing Nations as they transition to cleaner, lower carbon power generation, in perhaps what could be the greatest infrastructure boom in history.

Does a decarbonising world need atomic energy? (LGIM, 2019)

For compliance reasons, this paper is NOT accessible in the United States and Canada

LGIM investigates what role the seemingly very ‘un-green’ option of nuclear power has to play in the energy mix of the future. For Developing Countries, it appears to remain a viable option.

POLICY AND SECTOR INSIGHT

Electricity, Electric Vehicles, and Public Policy: 8 Key Takeaways (OIES, 2019)

The second workshop by the Oxford Institute for Energy Studies (OIES) examines the impact of disruptive change on the transport sector. Focusing upon the prospects of deep EV penetration, the workshop recognised the key role that electricity would play, but also noted that public policies, new technologies and changing social habits would also be key drivers of such penetration.

Navigating the Way to a Renewable Future: Solutions to Decarbonise Shipping (IRENA, 2019)

IRENA investigates the maritime industries' 3% contribution to greenhouse gas (GHG) emissions, how the sector is structured and explores some of the key areas

INFRASTRUCTURE

Time to power up electric vehicle charging? (LGIM blog, Aug 2019)

For compliance reasons, this paper is NOT accessible in the United States and Canada

In this report from LGIM, they propose that for widespread EV adoption, a low-cost charging infrastructure is essential, but deploying such infrastructure so that it provides worthwhile returns may be more complicated than first anticipated.

Long Live Our Batteries: Standardising recycling, the challenge in the EV market (Candriam, 2019)

For compliance reasons, this paper is only accessible in the UK & Europe

Candriam investigates one of the key challenges that will face the EV market; howto recycle the millions of used electric vehicle batteries. Companies are beginning to put recycling infrastructure in place, but will it be sufficient?

Investing in U.S. Energy Infrastructure (UBS AM, Dec 2018)

UBS investigates the U.S energy infrastructure market, outlining both its non-homogeneity and some of the risks and opportunities prevalent in the different areas of production, transmission and processing of various types of energy.

FINANCE AND THE ENERGY TRANSITION

Financing the European Energy Transition (Aquila Capital, 2018)

Aquila Capital explores the changing nature of energy supply in Europe, focusing upon the renewable sector and investigating some of the challenges and choices that arise from the process of energy transition.

How green bonds can finance the transport revolution (NN IP blog, 2019)

NN Investment Partners suggests that, at least in Europe, one way in which car manufacturers can at least partially fund the acceleration of the ‘transport revolution’ and help economies transition to a ‘greener future’ is via the issuance of green bonds.

Decarbonization Factors (State Street, 2019)

State Street investigates shifts in institutional money flow as they relate to decarbonisation factors, finding that they deliver both positive, and significant, alpha.