Sustainability has entered the board of many of the company’s executives and the money is earmarked, especially in the electric vehicle space, if there is any trend in investment and research and development commitments.
“ESG (environmental, social and corporate governance) has become a priority for our industry, not only because of the long-term impact of emissions, but also … the quality of the governance issue “Nissan CEO Makoto Uchida told CNBC Europe’s” Street Signs “on Tuesday.
“And ESG has a significant impact on the way we car manufacturers do our business. Of course, over the last few decades, the industry has come under considerable pressure from government and society because be more sustainable, but dealing with a more conscious consumer, ”Uchida said, has sparked“ a greater emphasis on areas such as electrification, autonomy and connectivity, which I believe the industry needs to move forward with ”.
Nissan recently announced its goal of being carbon neutral in 2050 and plans to electrify 100% of its new vehicles in the early 2030s. The all-electric Nissan Leaf hit 500,000 units in sales in 2020, a car which the company has been producing since 2010.
Investment in electric vehicles and EV components appears on a track. California-based investment company Wedbush believes electric vehicle shares could rise as much as 50% this year, stressing that there is room in the market for more than Tesla. And in 2020, market research firm Fortune Business Insights valued the electric vehicle industry at about $ 250 billion.
EV components and materials are also ready to win. Goldman Sachs, in a February note, highlighted six EV battery specialists with significant positive potential.
“There is a business imperative”
For Mario Greco, CEO of Zurich Insurance and a founding member of CNBC’s ESG Council, there really is no choice but to seek ESG solutions to climate change.
“There’s a business imperative,” Greco told CNBC. “The most important thing is to work on prevention. Reassuring climate risk is expensive and will be more expensive.”
Zurich Insurance has set new climate targets for its investments and operations, as it aims to become a zero-emission net business by 2050.
“We need to transform the industrial sector and transform our societies,” the CEO said. “And insurance can support that transformation; what insurance can’t do is pay only for the damage from climate change. But the transformation of the industrial sectors and the transformation of our way of life today is one thing. that we will live and make him happy to continue to move forward. “
Insuring against climate risk will be a major challenge as weather events become more extreme; what is needed in this context is to “work on prevention and work on transforming these risks into different business models,” Greco said.
But none of this means that fossil fuels will soon be gone; in fact, the demand for fossil fuels will increase significantly in the coming years as urban populations continue to rise.
To counter this, Greco said, “I think we need to incorporate the cost of carbon into the pricing mechanism; today the price doesn’t affect the final price of any goods we buy. We need to fully incorporate that into the cost. of goods and this will accelerate and facilitate the transformation of the oil industries. “
—CNBC’s Sam Shead contributed to this report.