Reaching for net zero

Understanding the investment risks and opportunities created by what may be the largest redeployment of capital in history

Unless investment is ramped up – significantly – the world cannot meet desired net zero targets by 2050, according to a paper jointly written by BNY Mellon Investment Management and Fathom Consulting. And this is more about redeploying capital than new investment.

The research undertaken by BNY Mellon Investment Management’s chief economist Shamik Dhar and Brian Davidson, head of climate economics at Fathom, looks at existing global spending commitments, highlighting key areas of necessary advancement. There are significant hurdles the world needs to overcome on the road to net zero. With any transition, especially one of this size and scale, comes not just risk but opportunity. Analysis of investment needs by sector and by country shows that the net zero transition should offer opportunities to informed investors. Here we outline some of the paper’s key points.

Implications for investors

Excerpts from the report: An investor’s guide to net zero.

1.The nature of around US$100 trillion worth of investment will be very different in the net zero scenario compared to business as usual – this creates opportunities and risks.

2.The firms which profit most from the transition will not necessarily be the ones making most of the green investment.

3.Mining activity is set to increase significantly as demand for metals and minerals used for transition-related technology (i.e., lithium) soars.


Incumbents from all sectors, but especially energy and utilities, should play a key role in making net zero a reality; but if they don’t do the green investment, new players will.

Net zero video
Investors can do more to ensure the funds they manage are aligned with the Paris climate goal, and that the companies in which they invest are making the investments necessary to turn these pledges into reality
Shamik Dhar
Chief Economist
An overview
Corporate issues
Where in the world
At home

Download the full report

The conclusions and views expressed in this paper are derived from that research and are the opinion of the authors and do not constitute advice. All charts and data tables are provided for illustrative purposes only and are not indicative of the past or future performance of any BNY Mellon product.

Since 2019, Fathom Consulting has provided bespoke macroeconomic modelling and scenario analysis for BNY Mellon IM’s quarterly economic and investment
outlook publication, Vantage Point.

Quarterly meetings are held to decide the key questions that will inform developments over the forecast horizon so that Fathom can conduct detailed scenario analysis that is theoretically founded, empirically driven and consistent with BNY Mellon IM’s house views. This helps to inform stakeholders of the outlook for the economy and markets, as well as the risks.

Fathom also engages in other bespoke projects for BNY Mellon IM, such as the work and analysis involved in the production of this research. BNY Mellon IM hired Fathom Consulting to provide expertise on the economics of climate change and undertake certain elements of this project. The final output, presented in this report, reflects the efforts of both parties.

The modelling framework and report conclusions were developed in collaboration, while Fathom’s proprietary climate data and tools were used to develop the sectoral risk framework presented in this report.

1This was an American initiative enacted in 1948 to provide foreign aid to Western Europe

Important Disclosures