Renewable energy has to be massively expanded if we are to transition from a black to a green economy. That requires new solar and wind parks along with the upgrading and expansion of our energy infrastructure, so we are able to integrate green energy into the power grid. Better infrastructure is also required to store surplus solar and wind power, so society can draw on green power as required. Hence, we need to create a flexible energy system with a focus on upgrading energy infrastructure or developing battery and hydrogen technologies. The fund invests in Avangrid, for example, a leading US renewable energy company. Avangrid plans to produce 20 GW of solar and wind energy, which will provide power to more than 11.5 million homes, and the company is upgrading and building new infrastructure so that renewable energy can reach consumers. In addition, Avangrid is building infrastructure and solutions for electric cars and green hydrogen, which are important elements in creating a climate-friendly transport sector.

A great many raw materials are needed to produce climate technology. As more wind turbines, solar panels and batteries are produced, so the pressure on and demand for raw materials increases. The fund invests in mining company Antofagasta, which produces copper, one of the key raw materials for a successful green transition. Four to six times as much copper is needed to produce energy from wind turbines and solar panels as conventional energy, while four times as much copper is used to produce electric cars compared to conventional cars. Large amounts of copper are also used in energy infrastructure, such as charging stations for electric cars, energy storage facilities for renewable energy and in electrical cables and transistors that can handle power generated from renewables. Antofagasta has also set ambitious goals for reducing the environmental and climate impact of its copper production. For example, the company has a goal of only using renewable energy in its mining operations from 2022.

Huge investments are required if we are to transition global energy consumption to renewables. And if companies are to be in a position to make the necessary investments in green energy and infrastructure, then that will require financing, and here the banks and financial markets will play a key role. The OECD, for example, expects that bank lending to projects that support the Paris Agreement will increase to around USD 600 billion a year in the 2030s. Along with green bonds, where banks also help facilitate issuance, financing will play a key role in providing companies with the financial muscle to invest in wind, solar and infrastructure projects, energy-efficient property or to reduce the climate impact of transport, food production, water infrastructure or waste management. Furthermore, several banks are in the process of setting targets for how much CO2 their loans to companies may emit. This contributes to companies focusing more on reducing their CO2 emissions in order to be able to finance their business via the banks. The fund has, for example, invested in Toronto Dominion Bank, which is the first North American bank with the ambition that their loans to companies may not emit CO2 by 2050 and should live up to the climate goals of the Paris Agreement. In addition, the bank has a goal of facilitating USD 100 billion for CO2-reducing projects. In part this is to be through direct loans to companies that have specifically borrowed money for renewable energy projects.