Tdworld 20065 Money Climate Change

Climate and Capital are Fundamentally Not at Odds

Oct. 15, 2019
The intersection of data analytics and the financial industry is coming to fruition, renewables are the best and most ethical way to maximize monetary returns while also combating the damage of climate change.

While there plenty of myths about the current state of climate change, there are two misconceptions that impede our ability to reverse the damage that greenhouse emissions have already caused that there are far more problems than there are solutions, and that climate and capital investment are fundamentally at odds.

There’s no shortage of negative forecasts and apocalyptic visions about climate change and what the planet will look like for the next generation. However, what’s less talked about in the media are the incredible and innovative developments at the intersection of technology and energy.

The term "internet of things (IoT)" gets thrown around a lot in today’s news coverage of various industry sectors. Though it may seem to be a hard-to-grasp, abstract term, what you may not realize is how much IoT is involved in much of your everyday life. In layman’s terms, IoT is when machines communicate without any human interference. Examples of objects that can fall into the scope of IoT include certain security systems, thermostats, electronic appliances, speaker systems, and cars. However, many people are unaware of how IoT can help save the planet.

For example, businesses can start reducing their carbon footprint by using simple sensors in their office facilities — maximizing energy efficiency in the built environments. Sensors have the ability to monitor the amount of waste generated, the energy consumed by inhabitants, and more. Further, data from renewable energy assets like wind turbines can be pulled directly from the source into the cloud to better understand how to maximize output.

Artificial intelligence (AI) is being used to transform energy usage all over the world. In particular, machine learning and deep learning serve as the basis for predictive analytics and augmented analytics. The International Data Corporation (IDC) forecasts that there will be roughly US$185 billion invested in AI and analytics this year alone, projecting a 12% compound annual growth rate (CAGR) through 2024. The IDC also projects that by 2022, more than 60% of global GDP will be digitalized.

Many people often say that the future is digital, but as you can see, the future has arrived — our present is digital. To fully use these technologies and to prepare for the ones to come, people must harness the capabilities of data intelligence by staying educated, developing even more solutions, and ultimately, putting those solutions to work.

The common belief that renewable energy is more costly than unsubsidized nuclear, coal, and natural-gas-based power is being dispelled as clean energy assets reach parity. Today’s consumer wants three basic things: reliability, affordability, and environmental responsibility. Fortunately for them, innovative and cost-effective energy asset technologies are being developed and implemented every single day. These technologies are making renewable investment much simpler and worth considering.

Renewable energy has officially become the best alternative to high-cost nuclear power — so much so that there are only 14 countries still considering the construction of nuclear reactors. Further, renewables are playing a large role in the global economy. The Climate Bonds Initiative found that global green bond issuance surpassed the US$100 billion mark by late June of this year.

This is the first time this milestone has been reached within the first half of a year. As expected, with so many positive advantages, there are a few concerns that come with renewables. It’s worth recognizing that renewable energy is less protected than other energy options in subsidized markets and can still fall victim to the ebbs and flows of the global market economy.

Nevertheless, with the current state of climate change, combatting and reducing the greenhouse effect is necessary and crucial. Fortunately, many of the economic principles of these applications will create new markets. Investors and financial institutions alike can use data intelligence to make decisions that minimize investment risks while maximizing capital returns. At the end of the day, renewable energy technologies can and will save organizations money.

Investors ultimately want less risk and more reward. Smart data analytics platforms can deliver this along with greater transparency to provide stronger investment security. This security can help investors make the smart and necessary transition toward renewable energies.

The intersection of data analytics and the financial industry is just coming to fruition, and renewables are the best and most ethical way to maximize monetary returns while also combating the damage of climate change. This can be done because the data harnessed from clean energy assets can be in real time, can be made actionable, and can provide investors with a clear picture of how to best maximize their returns.

Climate change solutions are coming from big data, predictive analytics, AI, and IoT. The future has arrived, and there no longer needs to be a choice between protecting the planet and gaining greater financial returns.

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