The transition to net-zero global greenhouse-gas emissions by 2050 would require $275 trillion of investment in physical assets—a massive commitment that will lead to an almost unprecedented reallocation of capital. In the near term, significant investment will be required in clean power, necessary to run electric vehicles and to decarbonize buildings, while emerging markets and developing economies need committed finance to ensure the transition plays out across global value chains. With a supportive environment in place, private financial institutions may facilitate as much as $3.5 trillion of annual financing opportunities between 2022 and 2050. Commercial banks could capture $2.0 trillion to $2.6 trillion of this opportunity, while asset managers, private equity, and venture capital funds would provide $950 billion to $1.5 trillion.

Strategically, financial institutions have a chance to grow the business while providing vital resources to decarbonise the economy.