PwC, in conjunction with the International Forum for Sovereign Wealth Funds (IFSWF) and One Planet Sovereign Wealth Fund Network (OPSWF), has published their new report on sovereign wealth funds and the green energy transition.
The report explores the role of long-term investors in the green energy transition and notably finds that global private investments into the infrastructure underpinning the energy transition increased more than eightfold between 2010 to 2023, from USD73 billion to USD604 billion.
Sovereign wealth funds (SWFs) are increasingly investing in the green energy transition, with renewable energies topping climate investment priorities (USD5 billion poured into renewable energies in 2023 – up from USD3 billion in 2022) – while investments in EV and batteries shot up to USD2.78 billion from negligible amounts in 2022.
SWFs are increasingly paying attention to climate-related risks and opportunities within their portfolios – 34.5 per cent have already assessed the carbon footprint of their whole investment portfolio, while 41.4 per cent are already in the process of doing so.
While SWFs are increasing their green energy transition investments, the world faces a major shortfall in funding overall – in 2023, only 0.4 per cent (USD2.9 billion out of USD729 billion) of global investments into energy transition infrastructure came from SWFs and PPFs.
Only around USD236 billion (out of USD1.7 trillion) in energy-transition related investments in 2023 went to emerging markets and developed economies.
