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Going climate neutral will cost trillions of dollars: Credit Suisse CEO

Brian Sozzi

Creating a healthier planet won’t come cheap.

A “massive investment” will be needed to reach carbon neutrality, Credit Suisse CEO Tidjane Thiam said on a panel Wednesday at the World Economic Forum. Thiam put the price tag at “trillions of dollars.” As for who would foot the bill, Thiam responded to a question by Yahoo Finance by noting “there is a lot of capital in the world.”

Thiam’s projection echoes others.

The European Union said recently it will invest more than $1 trillion for sustainable investments over the next decade. As part of its “European Green New Deal” unveiled late in 2019, the EU plans to be climate neutral by 2050. Projections peg Rep. Alexandria Ocasio Cortez’s “Green New Deal” plan to cost the U.S. $93 trillion in its entirety.

Indeed investment banks such as Credit Suisse stand to profit a good bit as Corporate America and government agencies issue green bonds to support ESG-related initiatives. To that end, last September Credit Suisse teamed up with the Climate Bonds Initiative to create a “sustainable transition” bond market. In 2017, Credit Suisse established the Impact Advisory and Finance (IAF) department — it reports directly into Thiam, underscoring the importance of the green bond market looking out over the next decade.

Credit Suisse CEO Tidjane Thiam attends a session on the opening day of the World Economic Forum (WEF) 2018 annual meeting, on January 23, 2018 in Davos, eastern Switzerland. / AFP PHOTO / Fabrice COFFRINI (Photo credit should read FABRICE COFFRINI/AFP via Getty Images)

The Climate Bonds Initiative said back in November the green market would surge 41% to nearly $250 billion in issuance in 2019. No yearend figures have been released. The Climate Bonds Initiative estimates the size of the market would surge to $1.5 trillion by 2024.

Some high-profile companies have come out publicly with some major carbon neutral messages ahead of the climate change focused World Economic Forum.

Bank of America said Tuesday that it achieved its carbon neutrality goal a year ahead of schedule, pending third-party verification. The company says it has reduced emissions by more than 50% in its facilities since 2010. Microsoft announced last week it will be carbon negative by 2030, fueled by efforts to slash carbon emissions by half.

Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Watch The First Trade each day here at 9:00 a.m. ET. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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