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EARTH DAY 2023: Build a Sustainable Future

From cement to electronics, emerging markets are the world’s workshops and investors can play a key role in supporting their move to a sustainable footing so we can realize a low-carbon future.

  • 04/18/2023

The Investment Need

"INVEST IN OUR PLANET is the theme of this year’s Earth Day. Emerging markets, in our view, are key to implementing this message. From cement to electronics, emerging markets are the world’s workshops and they need to move to a sustainable footing so we can realize a low-carbon future. The good news is the potential work and wealth this shift will create is a win-win for citizens, employers and investors.

Timing is everything and there’s been no better time to invest in our planet." Kathlyn Collins, Head of Responsible Investment and Stewardship
From billion to trillion

That's the increase in annual clean energy spending that emerging and developing countries will need to make by 2030 in order to meet the world's 2050 net zero goals

Source: IEA, 2021

Emerging Markets Are Transitioning to Cleaner Sectors

Regional annual investment in energy transition, defined as money spent to deploy clean technologies such as sustainable energy, electric vehicles, hydrogen and carbon capture. Asia Pacific now accounts for more than half of global energy transition investment. In 2022, it was both the largest region for investment and the region with the highest growth.

Source: BloombergNEF, as of Feb 2023.
AMER - North, Central, South America; EMEA - Europe, Middle-East, Africa; APAC - Asia and Pacific

Powering the Shift

New-build solar-energy plants are environmentally sustainable and, despite inflationary increases in the cost of materials, freight, fuel and labor, are a significantly lower-cost source of power compared with new coal and gas stations.

Coal-fired plant energy cost (MWh)

Gas-fired plant energy cost (MWh)

Solar-powered plant energy cost (MWh)

 

Note - Average energy cost/per new plant. Source: BloombergNEF,2022

 

IMPORTANT INFORMATION

The views and information discussed in this report are as of the date of publication, are subject to change and may not reflect current views. The views expressed represent an assessment of market conditions at a specific point in time, are opinions only and should not be relied upon as investment advice regarding a particular investment or markets in general. Such information does not constitute a recommendation to buy or sell specific securities or investment vehicles. Investment involves risk. Investing in international and emerging markets may involve additional risks, such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. Investing in small- and mid-size companies is more risky and volatile than investing in large companies as they may be more volatile and less liquid than larger companies. Past performance is no guarantee of future results. The information contained herein has been derived from sources believed to be reliable and accurate at the time of compilation, but no representation or warranty (express or implied) is made as to the accuracy or completeness of any of this information. Matthews Asia and its affiliates do not accept any liability for losses either direct or consequential caused by the use of this information.