Energy efficiency is an important building block for the 2050 net-zero goal. Groundbreaking goals were agreed in the 2015 Paris Climate Agreement, which the EU formalised in the European 'green deal' and the 'energy efficiency first' principle with the aim of limiting global warming to 1.5 degrees Celsius.

In 2019 the UK became the first major economy to pass laws to reduce its greenhouse gas emissions to net zero by 2050. Improving energy efficiency, together with the expansion of renewable energy is the most important measure to achieve this goal, true to the motto: 'The best kilowatt hour is the one that we don’t use'. The shift away from high investment costs towards ongoing service costs, offset by energy savings will increase the willingness of energy consumers to implement these projects. The need for financing will therefore continue to grow.

In addition to their significant contribution to achieving climate goals, energy efficiency investments offer institutional investors attractive returns and minimise the greenwashing risk, making this asset class an attractive addition to institutional portfolios.

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