37 Sustainability Report 2021 Climate Transition | Closing the Gap Through Partnerships Closing the Gap Through Partnerships The climate challenge is complex and cannot be addressed by any one firm alone. This reality requires partnership, which is why we consistently engage external stakeholders and establish strategic partnerships with other organizations to complement our work with clients. In particular, we look to work collaboratively with partners whose strengths and areas of focus complement our own, such as in regional and emerging markets where there may be varying paths to climate transition. Emerging markets are critical to the overall transition to a net zero future. In the past 10 years, annual global energy transition investment notably increased, from $290 billion in 2011 to $501 billion in 2020. While emerging markets accounted for an increasingly large share of global investment, high-income economies have been pulling ahead in recent years, with high-income markets recording a 24% year-on-year increase in investment, while emerging markets experienced a 21% contraction in 2020 1. We are firmly committed to leveraging our position to drive capital toward regions of the world that have the greatest need, and we are looking for ways to alleviate the financial burden of moving from high-carbon to more sustainable economic solutions. From engagement with external stakeholders to collaborative program development and philanthropic initiatives, we leverage our full toolkit to identify and support growth and opportunity in these areas, creating a wide range of cascading solutions. Among the world’s emerging and regional markets, Asia has tremendous potential for decarbonization but requires the heaviest level of outside investment. According to the Global Financial Markets Association (GFMA) report Climate Finance Markets and the Real Economy , demand for resources and capital in Asia is estimated at $66 trillion — 55% of the total investment required for a complete global climate transition. The largest investment need by sector is for electrification of technologies and processes and the corresponding switch from fossil fuel-based power to renewable power. To achieve this, we need clean energy investment to reach five to eight times the amount of current levels. A lack of urgent action today will result in significantly higher need for climate adaptation and mitigation investments tomorrow. The need is clear: we need more investment, at a faster pace, in emerging markets, such as South and Southeast Asia. We believe that regional partnerships are key to achieving this goal. 1—Climate Finance Leadership Initiative: “ Unlocking Private Climate Finance in Emerging Markets ,” April 2021. CLIMATE TRANSITION Driving Sustainable Growth in Emerging Markets Through Partnerships