The climate transition, in practice

Many low-carbon technologies are following “hockey stick” adoption patterns, where long periods of slow deployment are followed by sharp acceleration as costs fall and scale increases. Solar and batteries are already on this trajectory, while other technologies are approaching similar tipping points. This shift reflects how policy support, innovation and manufacturing scale can combine to transform markets quickly once economic thresholds are crossed.

Energy storage is evolving into a commercially viable infrastructure asset, supported by improving technology and rising demand. The sector is projected to grow more than 35% annually, with the US market expected to expand around 20 times between 2020 and 2030. Storage is becoming essential to balance intermittent renewable supply and stabilise energy systems.

Much of the grid infrastructure in developed markets dates back to the 1960s and 1970s, limiting its ability to integrate renewable energy. Transmission projects often take decades to develop due to regulatory and permitting complexity, creating a mismatch with faster-moving generation investment. This gap is increasing the importance of storage and grid modernisation.

Enhanced geothermal systems are emerging as a potential breakthrough in the transition, using technologies adapted from oil and gas drilling to access heat deep within the earth. This approach expands geothermal beyond conventional geographies, turning it into a more globally deployable resource. Progress depends on reducing drilling costs and proving scalability.

Growing electricity demand and the need for stable, low-carbon baseload power are driving renewed interest in nuclear energy. Advances such as small modular reactors are aiming to improve cost, safety and deployment speed compared with traditional nuclear plants. As energy systems become more electrified, nuclear is increasingly positioned as a complement to intermittent renewables, helping to maintain reliability while reducing emissions.

This interview with the founder of Neustark explores how mineralization technologies can lock CO₂ into recycled concrete, offering a pathway to permanent storage. Current capacity remains small, but the model illustrates how engineered removals could scale if demand, infrastructure and pricing mechanisms develop in parallel.

Climate factors are being integrated into investment processes to manage risks, identify opportunities and support real-world outcomes. This includes dedicated climate strategies, rules-based portfolios and stewardship approaches that align financial performance with transition objectives, reflecting a shift from high-level intent to measurable implementation.

Climate risk is increasingly recognized as a macroeconomic and financial stability issue that affects countries, companies and investors simultaneously. Impacts are transmitted through multiple channels, including physical damage, policy changes and market repricing. Understanding these interconnections is critical for assessing long-term risk and capital allocation in the transition.

Fixed income is an important tool for both financing the transition and managing climate risk across portfolios. Many investors have focused on equities, but climate risk affects all asset classes and needs to be addressed in bond allocations as well. Rules-based fixed income strategies use data on current and expected emissions, transition plans and qualitative factors to tilt portfolios toward issuers better positioned for decarbonization, while maintaining diversification and stability within multi-asset portfolios.