> ## Content Index > Fetch the complete content index at: https://www.financealliance.io/llms.txt > Use this file to discover other available public pages before exploring further. # Finance and the road to a low carbon economy - URL: https://www.financealliance.io/finance-and-the-road-to-a-low-carbon-economy/ - Published: 2026-11-09T09:55:26.000Z - Updated: 2026-11-09T09:55:26.000Z - Description: Companies doing good work on their energy transition tend to see their stocks perform better than their counterparts, and that will only increase. - Author: Isabel Divanna - Tags: ESG, Articles In 1992, when I was 13 years old, I volunteered at the World Summit in Rio. It dates me to say I was there, but that summit, the precursor of COP and the first convened to look at environmental sustainability, left a real mark on me. Growing up in Brazil, [environmental issues](https://www.financealliance.io/7-benefits-of-esg-investing/) felt very local. We talked about deforestation of the Amazon and about using ethanol instead of diesel in our cars. But working alongside different brands and national policy-making groups that summer, I realized this was a global issue. If you grow up in Brazil, you often feel like an appendix to the world, part of history but sitting on the outside. Rio gave me the intent to be part of the [solution](https://www.financealliance.io/7-data-management-problems-and-solutions/), and not just in Brazil. That sense of wanting to make a long-lasting, widespread difference has stayed with me ever since. --- **This article is based on Isabel's** [**podcast episode**](https://fast.wistia.com/embed/channel/bk71ekafa7?wchannelid=bk71ekafa7&wmediaid=cluoc1x0oi)**, which you can watch in full here:** --- I studied history and political philosophy at Cambridge, then built a long and varied career in a sustainability consultancy focused on waste, in renewable energy at Renewable UK, and in other [membership](https://www.financealliance.io/insider-membership-plan/) and trade bodies. Today I'm an Associate Director at The Carbon Trust, where I've led the agriculture, food, and drinks practice and worked across [manufacturing](https://www.financealliance.io/enterprise-resource-planning-for-manufacturing/) and sustainable finance. I like to connect the dots. Many people are deep technical experts in one area, but sustainable change happens when different pieces of the puzzle come together to form the bigger picture. ## **Every company is different** At Renewable UK, we put together the first ESG strategy for the whole sector in 2021 and 2022, just after COP26 and COVID. Renewables companies benefited from a halo effect of generating clean energy, but that didn't mean they had no work to do on decarbonizing, staying well governed, and renewing their social license to operate. A trade body can offer that broad-brush view of what unites a sector. Working with companies directly is different. I get an intimate understanding of where sustainability sits in their business strategy, how bought in the [C-suite](https://www.financealliance.io/chief-revenue-officer-vs-chief-financial-officer/) and the board are, and whether they have sensible governance mechanisms. Are they listed? Are they prepared to take equity or debt? What sustainable finance suits them? Even two biscuit manufacturers using very similar supply chains and commodities will be very different, because of how they've been organized and the mergers and acquisitions they've made. There is no one-size-fits-all. [How great CFOs master the unknownA good CFO stays level-headed, weighs the pros and cons of every decision, and never says no, or yes, for the wrong reasons.![](https://storage.ghost.io/c/a5/73/a5734519-d6ac-4b17-95b8-f7a3866730ab/content/images/icon/android-chrome-192x192-a8b4ba3a-4b17-44e6-a1e6-d829d69401d9.png)Finance AllianceDiya Sagar![](https://storage.ghost.io/c/a5/73/a5734519-d6ac-4b17-95b8-f7a3866730ab/content/images/thumbnail/Copy-of-FA_Website_Article_Images_Author_Highlight--50--5a3ef458-c8e6-47b8-9bd2-219ccf5d832b.png)](https://www.financealliance.io/how-great-cfos-master-the-unknown/) ## **Invest in decarbonization, not business as usual** I'm often asked whether [banks](https://www.financealliance.io/the-rise-of-banking-as-a-service-transforming-the-financial-landscape/) should divest from carbon-heavy industries or stay engaged and push for change. I'm not being deliberately controversial, and it's a view many of my Carbon Trust colleagues share: financial institutions need to keep [investing](https://www.financealliance.io/10-big-picture-financial-planning-steps/) in what makes them resilient in the long term and in what they're regulated to do. The last time those patterns were abandoned, we got crises like 2008. Alongside projected returns, though, investors need to add [transition](https://www.financealliance.io/7-steps-of-the-finance-transformation-journey/) planning as a KPI. Should they divest completely from oil and gas? They cannot. But they should invest in companies that have demonstrated solid, credible transition plans, and work with clients across their portfolios to put sensible plans in place. This matters for financial and economic resilience, and for a just [transition](https://www.financealliance.io/transforming-from-accounting-to-fp-a-business-partnering/). Divesting too rapidly from well-established, high-emitting sectors would generate social, economic, and political consequences the world can't cope with right now. The transition doesn't need to be slow. It needs to be well thought out. That's my answer in 2026; ask me again in ten years and it may be different. ## **What makes a transition plan credible** After Paris, many companies simply set a net-zero target and thought that ticked the box. What investors need to see is a deliberate strategy that moves from ambition to implementation. I always get suspicious when I download a company's transition plan as a separate PDF. A transition plan should be aligned to the [company's strategy](https://www.financealliance.io/how-cfos-power-business-strategy/). It should explain why the future business model needs to move to a low-carbon model, which products, services, and assets will grow, and which will be phased out. These are strategy questions, not climate questions. A good plan also has financials attached, using scenario analysis to show the impact on revenue, asset values, capital requirements, and financing needs. It needs a roadmap of what happens by when, and who is accountable, backed by proper governance. And it should consider external dependencies like policy delays, physical climate impacts, and technology breakthroughs. One client of mine makes a component widely used in oil and gas. With hindsight, if they had applied it to solar panels around 2018 or 2019, they would have cornered that market. Somebody else supplies it now. What a plan shouldn't be is a 70- or 80-page document on the website that only investor relations looks at. I have clients who spent seven figures on one. Honestly, a one-slide roadmap [communicated transparently](https://www.financealliance.io/how-to-communicate-financials-to-executives/) is just as good. The real strategy is commercially sensitive, so it may not be shared at all. We're also seeing Chief Sustainability Officer roles being eliminated and the work normalized into finance, [procurement](https://www.financealliance.io/the-best-working-capital-strategies-for-fp-a/), and HR. That's not the best news for sustainability consultants, who lose a long-standing point of contact. But it's the future. Sustainability isn't meant to be a separate strand within an organization. It is business strategy. [Building flexibility into your financial strategyWilliam Fink shares how today’s CFOs can lead with foresight by building adaptable financial strategies rooted in data, planning, and cross-functional teamwork.![](https://storage.ghost.io/c/a5/73/a5734519-d6ac-4b17-95b8-f7a3866730ab/content/images/icon/android-chrome-192x192-4e758814-0070-433e-a73c-1dcad625877a.png)Finance AllianceWilliam Fink![](https://storage.ghost.io/c/a5/73/a5734519-d6ac-4b17-95b8-f7a3866730ab/content/images/thumbnail/Copy-of-FA_Website_Article_Images_Author_Highlight--41--aca05447-1b99-4914-a735-4903d9f8d705.png)](https://www.financealliance.io/building-flexibility-into-your-financial-strategy/) ## **Who gets left behind in the just transition** At Renewable UK, I helped codify what a just transition meant for renewables. Back then, we even debated whether to call it a fair transition or a just transition, and the term doesn't translate well into other languages. The idea is that a net-zero economy shouldn't leave anybody behind. Economic actors need to look beyond emissions to the social and economic impact on workers, communities, consumers, and small businesses. Who benefits, and who bears the cost? If it's the state, taxpayers pay. If it's businesses, consumers pay. The groups usually left behind won't surprise anyone. Close to a million people work in oil and gas, and you can't have them all lose their jobs without passporting them into other careers. The same goes for steel, cement, and automotive manufacturing. Then there are [communities](https://www.financealliance.io/community/) that depend on one industry. I was watching *The Full Monty* the other day, and it reminded me what happens when a town's industrial infrastructure is dismantled. SMEs and supply chains are one of the biggest challenges. Their larger customers want them to demonstrate progress, but financing is often unclear or hard to access. Low-income households struggle too, because homes that haven't been retrofitted lose value. And emerging markets often lack the mechanisms to change. I spoke with a company in Colombia, which has all the sunshine you might need, but no real mechanism for a PPA and no easy way to get wind or solar at scale. Thinking about all of this creates complexity, and sometimes paralysis. But I think we can cope with it, if we want to. [What will define a high-performing CFO by 2030?The high-performing CFO of the next few years will be someone who got very good at knowing which few things were worth going deep on.![](https://storage.ghost.io/c/a5/73/a5734519-d6ac-4b17-95b8-f7a3866730ab/content/images/icon/android-chrome-192x192-10080142-d533-4743-905d-11a8441ad3ab.png)Finance AllianceTeresa Garanhel![](https://storage.ghost.io/c/a5/73/a5734519-d6ac-4b17-95b8-f7a3866730ab/content/images/thumbnail/FA_Website_Article_Images_Doodles--36--3fd36aa5-ef9d-40b3-9e87-22c2584408e0.png)](https://www.financealliance.io/what-is-a-high-performing-cfo/) ## **Carbon capture now, floating offshore wind later** Between the two, the best opportunity right now is carbon capture, because it's been better tested. CO2 transport and storage networks already exist, and industrial decarbonization is creating demand from cement, steel, chemicals, refining, and waste-to-energy. Many of us believe those sectors can't decarbonize without it. Longer term, carbon removal through bioenergy and direct air capture can generate removal credits, with plenty of buyers among airlines, tech companies, financial institutions, and governments. I love floating offshore wind, and I still think it's the biggest long-term opportunity, just not now. Investors with a high risk appetite can get in at early-stage project development before the final investment decision, in places like the Celtic Sea, ScotWind, the French Mediterranean, Japan, and Korea. Ports are the most overlooked opportunity, since nothing happens without heavy-lift quays, assembly facilities, and storage yards. Supply chain assets like mooring systems, anchors, subsea cables, and specialized vessels, plus the operating platforms needed for O&M, are attractive too. Remember, offshore wind took 15 to 17 years to become financially viable. Floating will follow a similar path. But it is a necessity for the energy transition, and nobody has come up with a better solution. [The £7.5 million lesson: What real FP&A influence looks likeHow do you close the FP&A influence gap? You clarify, challenge, and connect so that finance moves from being reactive to being influential.![](https://storage.ghost.io/c/a5/73/a5734519-d6ac-4b17-95b8-f7a3866730ab/content/images/icon/android-chrome-192x192-3029cdce-912e-426d-a6a3-5c43020d59b0.png)Finance AllianceAlexander Roche![](https://storage.ghost.io/c/a5/73/a5734519-d6ac-4b17-95b8-f7a3866730ab/content/images/thumbnail/Copy-of-FA_Website_Article_Images_Author_Highlight--19--b4493d09-c41d-4865-847f-c518423dd43b.png)](https://www.financealliance.io/what-real-fp-a-influence-looks-like/) ## **AI, energy, and water** [I'm a big fan of AI](https://www.financealliance.io/how-finance-teams-are-actually-using-ai-today/). It can improve grid management and forecasting, renewable integration, energy efficiency, industrial processes, and materials discovery, so I think its potential almost outweighs the downsides of its energy intensity. For investors, the main due diligence question is what energy will power a given data center. Can it be powered by renewables from the project's inception, not as a later consideration? And what will that asset look like in ten years, when we expect data centers to become smaller, modular units? The biggest nut to crack, though, is water for cooling. We already have the technology to solve the energy problem, but there isn't yet a solution for water. Community matters too. I've talked to developers looking at building data centers next to hospitals and schools so the heat can be reused, but is it noisy? What scares me most is bias. When I worked at Engineering UK, something like 82% of people in energy tech were white men, and what comes out of AI reflects who coded it. What excites me is efficiency. As a child in Brazil, I watched someone set metal letters at a newspaper press. That job no longer exists, and people were redeployed. Something that used to take me three hours now takes three minutes, and I can use the time I save for something that adds value. [How I’m thinking about AI after 27 years in financeAfter 27 years in finance, the fundamentals haven’t changed. We’re still chasing revenue, margins, and cash.![](https://storage.ghost.io/c/a5/73/a5734519-d6ac-4b17-95b8-f7a3866730ab/content/images/icon/android-chrome-192x192-914e194d-7062-4bcf-9cbf-50afc65ca937.png)Finance AllianceGeeta Malhotra![](https://storage.ghost.io/c/a5/73/a5734519-d6ac-4b17-95b8-f7a3866730ab/content/images/thumbnail/Copy-of-FA_Website_Article_Images_Author_Highlight--5--512e8b1f-3768-4459-8280-e56597b4b107.png)](https://www.financealliance.io/ai-in-finance-business-strategy/) ## **Decarbonization is a financial opportunity** When I talk to clients about avoiding greenwashing, I often bring up the buggy whip makers. At the turn of the 20th century, they were confident cars would never catch on. Within 20 or 25 years, they were gone. We can't pretend progress is always good, but we can't pretend it doesn't happen either. Often the best opportunity is to be an early adopter, like the people who got solar panels in the government's first round of funding. For skeptical finance leaders, my message is that the opportunities of decarbonization are financial ones: new products and services, efficiencies that avoid high energy prices, and resilience against physical and reputational risks. Around 70% of younger consumers say they care about sustainability and will pay a little more for it. Whether they put their money where their mouth is remains a question, but Amazon has disclosed that Climate Pledge Friendly products perform 12% better than others. That's big. This isn't only about doing what's good for the planet. That's great too, but businesses are in business to make money. Companies doing good work on their energy transition tend to see their stocks perform better than their counterparts, and that will only increase. What it takes is a strategy fit for the future, not the past, and a business model that matches it.