CLIMATE TRANSITION Closing the Gap Through Partnerships The climate challenge is complex and cannot be addressed by any one 昀椀rm 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. Driving Sustainable Growth in Emerging Markets Through Partnerships Emerging markets are critical to the overall transition to a Financial Markets Association (GFMA) report Climate Finance net zero future. In the past 10 years, annual global energy Markets and the Real Economy, demand for resources and transition investment notably increased, from $290 billion capital in Asia is estimated at $66 trillion — 55% of the total in 2011 to $501 billion in 2020. While emerging markets investment required for a complete global climate transition. accounted for an increasingly large share of global investment, high-income economies have been pulling ahead The largest investment need by sector is for electri昀椀cation of in recent years, with high-income markets recording a 24% technologies and processes and the corresponding switch year-on-year increase in investment, while emerging markets from fossil fuel-based power to renewable power. To achieve experienced a 21% contraction in 20201. We are 昀椀rmly this, we need clean energy investment to reach 昀椀ve to eight committed to leveraging our position to drive capital toward times the amount of current levels. regions of the world that have the greatest need, and we are looking for ways to alleviate the 昀椀nancial burden of moving A lack of urgent action today will result in signi昀椀cantly higher from high-carbon to more sustainable economic solutions. need for climate adaptation and mitigation investments tomorrow. The need is clear: we need more investment, From engagement with external stakeholders to collaborative at a faster pace, in emerging markets, such as South and program development and philanthropic initiatives, we Southeast Asia. We believe that regional partnerships are key leverage our full toolkit to identify and support growth to achieving this goal. and opportunity in these areas, creating a wide range of 1—Climate Finance Leadership Initiative: “Unlocking Private Climate Finance cascading solutions. in Emerging Markets,” April 2021. 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 Sustainability Report 2021 Climate Transition | Closing the Gap Through Partnerships 37