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“ESG investment concerns limit adoption”

Vicky Pryce, Chief Economic Adviser and board member at the Centre for Economics and Business Research, has told The Big Zero Show that despite increasing interest in sustainable finance, ESG investments remain a minor component of global funds

Lead economist Vicky Pryce, speaking at The Big Zero Show in Coventry, emphasised the critical role of Environmental, Social and Governance (ESG) considerations in shaping future investment strategies.

Ms Pryce underscored that achieving net zero emissions globally could require between $2.5 trillion (£1.9tn) to $9.5 trillion (£7.4tn) annually over the next decade, urging stakeholders to explore where such funding might originate.

During her address, Ms Pryce highlighted the current dominance of fossil fuel investments, amounting to approximately $3 trillion (£2.3tn) to $3.5 trillion (£2.7tn) annually, suggesting potential for reallocation towards sustainable initiatives.

She acknowledged, however, that ESG investments remain a small fraction of global funds under management, with concerns over their financial returns complicating widespread adoption.

Ms Pryce also discussed the uneven global investment landscape, questioning whether sufficient attention is being paid to developing nations under the Paris Agreement‘s directives.

She noted that while countries like China are making significant strides in renewable energy, substantial investments in coal-fired facilities persist, reflecting a broader global challenge in energy transition.

Vicky Pryce said: “There is a bit of a race on technology going on, but still, the issue is how we’re going to move to get that transition going on. Also, what pays from an investor perspective.

“Quite a lot of the renewable energy is non-viable. Look at what happened with offshore wind in the UK, where the latest auctions didn’t get anyone, actually putting a bid in.

“The reason is that they require huge subsidies from us, the taxpayer, no, via the government, to get those investments happening, because just think about it.

“The marginal cost of one extra unit of renewable energy is zero. Price is usually determined by that marginal cost. Now, zero does not encourage anyone to invest.”

Click the video to watch the speech in full.

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