Sustainability has made its way into many business executives’ dashboards and the money will follow – especially in the electric vehicle field, if investment trends and research and development commitments pay off.
“ESG (environmental, social and corporate governance) has become a priority for our industry, not only because of the long-term impact of emissions, but also … the quality of the governance issue,” Nissan CEO Makoto Uchida told CNBC’s “Street Signs Europe. “Tuesday.
“And ESG has a significant impact on the way we, auto manufacturers, do business. Over the past few decades, the industry has, of course, been under great pressure from government and society to be more sustainable, but with a more aware consumer. to go, ”said Uchida. said, has led to “greater emphasis on areas such as electrification, autonomy and connectivity, which I think the industry should move forward.”
Nissan recently announced its goal of being carbon neutral by 2050 and plans to electrify 100% of its new vehicles by the early 2030s. The all-electric Nissan Leaf sold 500,000 units in 2020, a car the company has been producing since 2010.
Investments in EVs and EV components seem to be happening on a runway. California-based investment firm Wedbush believes EV shares could rise by up to 50% this year, emphasizing that there is room in the market for more than just Tesla. And in 2020, market research firm Fortune Business Insights valued the EV industry at approximately $ 250 billion.
EV components and materials will also win. Goldman Sachs highlighted six EV battery specialists with significant upside potential in a February note.
‘There is a business need’
For Mario Greco, CEO of Zurich Insurance and one of the founders of CNBC’s ESG Council, there really is no other option but to pursue ESG solutions in the face of climate change.
“There is a business need,” Greco told CNBC. “The most important thing is to work on prevention. Insuring the climate risk again, it is expensive and it will become more expensive.”
Zurich Insurance has set new climate targets for its investments and operations as it aims to become a net-free emissions company by 2050.
“We need to transform the industrial sector and transform our societies,” said the CEO. And insurance can support this transformation – what insurance cannot is just pay for the damages of the climate transformation. But the transformation of the industrial sectors and the transformation of the way we live today is something that we will live and we will do. do too. be happy to continue. “
Insuring against climate risks becomes a major challenge as weather conditions become more extreme; what is needed in this context is “work on prevention and work on translating these risks into different business models,” Greco said.
But this does not mean that fossil fuels will disappear anytime soon; in fact, the demand for fossil fuels will increase significantly in the coming years as the urban population continues to grow.
To counter that, Greco said, “ I think we need to anchor the carbon cost in the pricing mechanism – today pricing doesn’t affect the final price of a commodity we buy. We need to anchor that fully in the cost of the goods and that will accelerate and facilitate the transformation of the oil industries. “
—CNBC’s Sam Shead contributed to this report.