AmCham Norway, in partnership with Citi and fellow Nordic AmChams, hosted an information-filled conversation with New York-based Bridget Fawcett, Global Chief Strategy Officer for Banking, Capital Markets and Advisory, and Global Co-Head of Sustainability & Corporate Transitions Investment Banking at Citi on the topic US-Nordic Sustainability Investment: Burgeoning Opportunities.
Fawcett opened by affirming that Nordic transatlantic foreign direct investment is indeed robust, as the Nordic countries combined comprise the 10th largest source of FDI in the US at $120 billion. She then outlined key areas that will continue to create opportunity for closer Nordic-US investment ties, namely within green investments.
The US is becoming an increasingly attractive market as its energy systems are set to significantly transition in coming years – the country is “on the cusp of a sustainability revolution” Fawcett said. The new, non-cyclical growth path will drive collective growth opportunities; however, a transition requires models that many do not comprehend – yet. Examples of revolutionizing transitions that are underway in the US include the rise of renewables and clean energy technology, developments within agriculture and food, urban planning, circular economy, social transformation, and digital and financial systems.
Fawcett illustrated how the path to net-zero by 2050 is facilitated by $70 trillion of capital currently moving to low carbon and transition businesses globally, which in turn, will have an impact on the pace and scale of changes in US. Break-through technologies and innovations are key components for achieving the energy transition. Moreover, data shows that the market is both receptive and demanding of sustainable commitments such as net-zero by 2050. The focus reflects an accelerating shift in attitudes among influential policy makers, investors, corporates, banks, and consumers. One of the main challenges for corporate leaders when making the transition is to consider short-term earnings versus positioning for long-term relevance.
President Biden’s American Jobs Plan, at an estimated $2.3 trillion, is a long-term investment in infrastructure that will support the US’ climate goals and energy transition – aiming to catalyze a range of opportunities including job creation, increase in GDP and propel the growth of new energy systems. As for the longevity of Biden’s sustainable investments, Fawcett described the holistic and comprehensive approach as unprecedented in recent history in terms of the number of investments and commitments that are embedded across all levels of the administration. “This is going to chart the US going forward” Fawcett added.
US Government tax and regulatory policies are in flux, but are necessary to support the energy transition, echoed by corporate leadership who confirm the need for such policies. Joint global sustainability programs, such as The Paris Agreement have proved to be important steps on the path to sustainability. The UN Climate Change Conference “COP26” taking place in November 2021 was described by Fawcett as “the great agenda equalizer,” and will drive the financial sector to address climate change.
According to Citi’s comprehensive perspectives, there are abundant opportunities and incentives for return on sustainable investment in the US over the coming years, and Nordic corporates are well-positioned. Nordic offshore wind, water/waste management, energy systems and urban mobility excellence paired with imminent US “sustainability revolution” is, mildly put, compelling.