The Standard Chartered’s latest Sustainable Banking Report shows strong interest among affluent investors in “transition investing,” a strategy aimed at financing the shift to a low-carbon economy.
The survey of 1,600 high-net-worth individuals across eight markets found that 87% expressed interest in transition investing, with nearly as many backing sustainable investing more broadly.Investors cited green hydrogen, low-emission fuels and carbon capture and storage as the most compelling themes, followed closely by electric vehicles and carbon markets.Despite the enthusiasm, half of respondents said transition investments carry higher perceived risks, as 46% pointed to the lack of benchmarks for evaluating products, and 44% were concerned about lower potential returns.
“We continue to see strong interest in sustainable investing among our affluent clients, and the concept of transition investing is one that our clients are increasingly interested in being educated on,” said Samir Subberwal, Global Head in Wealth Solutions and Chief Client Officer at Standard Chartered.
Transition investing is distinct from conventional sustainable investing in that it includes funding companies in high-carbon sectors such as steel or cement that have credible plans to align their operations with net-zero emissions targets. Only 15% of investors could fully define transition investing without assistance. The report suggests targeted education will be critical to unlocking capital for such projects.
Green hydrogen is produced by splitting water into hydrogen and oxygen using electricity from renewable sources, making it a zero-emission energy carrier. It is projected to replace fossil fuels in heavy industry, transport, and fertiliser production, helping cut carbon emissions in hard-to-decarbonise sectors.