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Carney spots massive disconnect in green finance rhetoric.

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TL;DR:

Mark Carney, chair of Brookfield Asset Management, has highlighted a “massive disconnect” between the rhetoric about green finance and the actual money flowing into green projects. While some financial professionals have expressed scepticism about the profitability of green investments, Carney argues that tracking investment flows demonstrates that there is significant motivation to back the transition to green energy. In 2023, investors invested 1.8 times as much in clean energy as in fossil fuels, according to the International Energy Agency, while global spending on clean energy is predicted to rise to $4.5tn annually by the early 2030s. However, last year, many investors in traditional green assets lost money due to the poor performance of wind and solar producers. Carney argued that “transition finance”, focused on energy sources with a low carbon footprint, offered the greatest profitability.

Key points:

  • Brookfield Asset Management chair Mark Carney has claimed there is a “massive disconnect” between the rhetoric about green finance and the money actually going into green projects.
  • Carney identified a pivot in messaging from financiers who said they will only back the green transition if it is profitable.
  • According to Carney, investment flows demonstrate there is significant motivation among holders of capital to support green initiatives.
  • Last year, the S&P Global Clean Energy Index closed down over 20% as the performance of wind and solar producers suffered.
  • Carney dismissed concerns about the profitability of green investments, suggesting that transition finance, focused on low-carbon energy companies, offers the greatest potential for strong returns.
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