Green finance going global
To achieve global net zero, every country needs to develop towards a ‘just transition economy’. Global
climate ambitions set high expectations for industry and require significant decarbonisation measures.
Meeting climate targets in industrial decarbonization necessitates substantial innovation and transformation beyond business-as-usual approaches. Industry must comprehensively analyze its supply chains to identify areas for significant improvement while navigating the deep technical complexities of its internal operations.
At the sector level, collaborative efforts will be the vehicle for maximising global environmental impact
while minimising duplicate efforts and enabling dissemination of decarbonisation best practices. Barriers
for industry manifest as complexities with changing internal technology and processes, risks associated with being first movers in sustainability transitions, and the significant capital needed for sustainability initiatives. These challenges are amplified for SMEs and organisations in EMDEs, which face another set of challenges. Climate technology solutions play an important role in transforming supply chains. A comprehensive sciencebased evaluation of 93 climate solutions demonstrates their availability, financial viability and technical feasibility across supply chains around the world. Another reference point is that 12 climate technology types are predicted to have reduction potential up to 90% of total human-made greenhouse gas (GHG) emissions if deployed at scale (McKinsey, 2023; UNFCCC, 2023). Technology deployment faces hurdles in early readiness levels for myriad reasons including funding, demonstrating performance at scale and perceived risk from external stakeholders. Supportive ecosystems for technology deployment are needed to achieve market success and net-zero ambitions.
There is an annual investment gap of USD 7 trillion to USD 9.2 trillion to reach a global net zero by 2050.
Of this gap, USD 4 trillion in capital needs to be allocated to clean energy and infrastructure (Climate Policy Initiative, 2023; IEA, 2023; IRENA, 2024). This massive financial demand reveals the gaps between current investments and the solutions for industrial decarbonization. Traditional financial mechanisms do not easily lend themselves to extended investment horizons, technological uncertainties and co-ordination of efforts across the supply chain of industrial decarbonization investments.
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