While global policy remains a key driver for the clean energy sector, the scale, scope and commitment of Chinese leadership will foment a structural change in the sector in 2011, Deutsche Bank’s latest cleantech risk analysis forecasts.
The Investing in Climate Change 2011, The Mega-Trend Continues: Exploring Risk and Return, published by the climate change research unit of Deutsche Bank’s asset management business, highlights the varying risk return profiles of different clean energy technologies. It shows that 2010 was the largest year on record for investment in clean energy, led by China, Europe and the US, and that globally, investment opportunity in the sector continues to improve.
China allocated the bulk of capital during the year, while the flow of government stimulus capital in the sector peaked across the world. China’s investment in clean energy will be a game changer for clean technology industries globally, the report says.
The report predicts that capital allocations from investors in 2011 will display a more sophisticated exploration of climate change risk within portfolios, while policy will remain to be a key driver. It also forecasts that investors will look to US state projects rather than those driven by federal policy. The importance of public-private partnerships in supporting renewable energy scale-up in developing countries will also be highlighted as the year progresses, it anticipates.
The report argues that a major shift in investor attitudes is leading institutional investors globally to take the risks posed by climate change into account, based on a growing realisation of the impacts climate change could have on their existing portfolios.
‘Institutional investors are giving greater consideration than ever before to climate change in their assessment of asset allocation,’ said Kevin Parker, global head of Deutsche Bank’s Asset Management division.
‘We have reached a critical point in our industry at which all the talk about climate change begins to translate into action. Asset owners everywhere are starting to move and their first impulse is to identify where in their portfolios the climate risk lies.’
The Investing in Climate Change 2011, The Mega-Trend Continues: Exploring Risk and Return report was compiled by Deutsche Bank Climate Change Advisors, the climate risk and research unit of Deutsche Asset Management. Deutsche Bank has an established presence in Europe, Germany in particular, and is growing its presence in the US, Asia and emerging markets. Its asset management has approximately $6.5bn under management.
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