Brown Industries: Our Transition Tightrope

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A seat for everyone is necessary at the climate action table. Sustainable Finance will fail in its mission if it continues to confine high-emitting industries to the sidelines.

The world economy is not aligned on a below 2°C temperature increase trajectory outlined in the Paris Agreement. High-carbon emitting industries, referred to as “brown”, are often ostracized from sustainable finance markets. Yet, by definition these industries harbor the lion’s share of potential for CO2 emission reductions, and many do not yet have substitutes (e.g. steel, aluminum, cement industries).

There is a balance to be found to address green puritanism that focuses solely on green industries and confines high-carbon emitting industries to the sidelines of sustainable finance. It is crucial to support these industries’ transition, while pursuing the integrity and stringent requirements that the climate emergency demands.

Drawing on this firm belief, we have developed a series of analysis methods, and a range of financial instruments to offer our clients a 360° transition support. Find out more in our report "Brown industries: the Transition Tightrope". 

It provides definition assessment methods as well as explores relevant financing tools. Our methodology frames a change management model that differentiates brown companies into groups depending on whether they need to transform, shrink or shut down. Using case studies, we examined how the 5 transition levers we identified were actioned by  companies across the cement, shipping, power or aviation sectors.