The global energy transition is a global trend of reducing our reliance on fossil fuels. Thanks to a combination of economic, technological, and political factors, more countries throughout the world are adopting renewable energy sources to help run the world. This helps to protect the environment as fewer and fewer fossil fuels are being used.
Protects the Environment
The global energy transition was originally designed to help protect the environment. Many companies relied on fossil fuels to provide them the energy they needed to run. While fossil fuels can be an effective and inexpensive way to get energy, the emissions caused damage to the environment and the world around us.
Through the global energy transition, companies work to replace their fossil fuel use with renewable energy sources, including wind and solar energy. This reduces how many fossil fuels are put into the environment, making it cleaner and safer for everyone. Thanks to the benefits to these companies and how easy it is to make the switch; most have been able to do the transition without any government regulations.
Changes for Companies
Companies will need to make changes to help join the Global Energy Transition. Luckily, technological change is helping to create the right economic incentives, so most companies are doing this on their own, without any regulations forcing them to go this way.
To show this is happening, more than 280 large companies throughout the world, from all types of industries, have committed to source 100% of their electricity from renewable sources instead of from fossil fuels. Some have been able to hit this target. Other companies are working to use more renewable energy sources, even if they can’t reach 100%.
Even more amazing is that some of the top oil and gas producers have committed to changing their business models to become more low carbon over the next three decades. All of these companies are doing it because it is good business. None of them, up to this point, are doing it due to government force.
Even the investing arena has seen changes due to the global energy transition. Climate investing is becoming more important for publicly traded companies than ever before. There are two main approaches available to climate investing. Investors can exclude companies that are negatively impacting the environment, or they can favor those who create solutions that are good for the environment.
The trend is for more investors to gravitate towards companies who have adopted global energy transition or have done other actions good for the environment. This can work well in enticing other companies to adopt some of the same methods over time as well when they see how it can benefit them too.
The global energy transition is important for us all. It creates a cleaner and healthier world for everyone while encouraging businesses to earn more money and be safe at the same time. When everyone can get on board, it can mean a brighter future for us all without all the negatives of fossil fuels.
The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Expressions of opinion are as of this date and are subject to change without notice.