Sustainability Around the Globe _ Investors' Key Focus Areas in 4Q24

Summary of Key Points from the Conference Call Industry Overview - Sustainability and Clean Energy: The report discusses various aspects of sustainability, including carbon markets, digital infrastructure, and the implications of US elections on environmental policies. [1][3][26] Core Insights and Arguments - Powering Digital Infrastructure: There is a significant demand for de-bottlenecking solutions in power generation, particularly for data centers. A projected shortfall of approximately 36 gigawatts (GW) in US power access for data centers is anticipated from 2025 to 2028, potentially growing to 60 GW by 2029. Solutions include siting data centers at operational natural gas and nuclear plants, and converting crypto sites to data centers. [17][18] - Natural Gas-Fired Power Generation: The report highlights the growing demand for new natural gas-fired power generation, particularly in regions with favorable policies. Companies like GE Vernova, Siemens Energy, and Mitsubishi Power are identified as beneficiaries of this trend. [18] - Power Additionality: The concept of "additionality" is becoming crucial for data centers, emphasizing the need for new power generation sources to accompany new demand. This is particularly relevant for nuclear and Small Modular Reactors (SMRs) as clean power solutions. [19][21] - SMRs and Nuclear Power: Interest in SMRs is increasing, driven by partnerships with major tech companies. However, new nuclear generation is not expected to meet immediate power needs for data centers in the near term. [22] - US Elections Impact: The report discusses the implications of the recent US elections on environmental policies, with a focus on the potential for ESG-related litigation and the fate of the Inflation Reduction Act (IRA). [26][27] - Carbon Markets Developments: The report outlines advancements in voluntary carbon markets, including new UK principles and EU certification frameworks. Demand for carbon removal technologies is expected to grow, with a projected increase in global carbon capture capacity. [4][39][41] - COP29 Outcomes: Key pledges from COP29 include commitments to increase energy storage capacity and climate financing, with developed countries aiming to triple climate financing to developing nations by 2035. [49][51] Additional Important Insights - European Regulations: The report highlights significant changes in European regulations, including revisions to the Packaging Waste Directive and delays in the EU Deforestation Regulation. These changes could impact various sectors, including consumer staples and packaging. [66][67] - Investor Sentiment: Investors are cautious about the potential rollback of environmental regulations under the new US administration, but there is a consensus that a full repeal of the IRA is unlikely. [27][32] - Sustainability DiGest Series: A new research series has been initiated to explore various sustainability topics, including climate resilience, circular economy, and water sanitation challenges. [5][59] This summary encapsulates the key points discussed in the conference call, providing insights into the current trends and future outlooks in sustainability and clean energy sectors.