Tikehau Focus - Climate Investing: Myths, Realities and Decarbonising the Economy Through Private Equity

The Intergovernmental Panel on Climate Change (IPCC) has been warning us since the 1990s about the urgency of addressing climate change. Today, climate crises and catastrophes frequently make headlines. Despite global challenges like COVID-19, inflation, and geopolitical tensions, climate action cannot be sidelined. In this Q&A, Pierre Abadie, Group Climate Director and Co-head of the Private Equity Decarbonisation Strategy at Tikehau Capital, addresses key questions to explore the myths and realities of climate investment and outlines Tikehau Capital’s approach to decarbonisation.

# Is it true that only new technology can save us from climate change?
Pierre Abadie: I believe this is a common misconception. While innovation can help, we already have the necessary tools to reduce emissions significantly. Measures like insulating buildings, electrifying transport and generating low-carbon electricity are achievable today with existing technology. What’s needed is large-scale implementation, which requires engineering, manufacturing and local labour, rather than waiting for a breakthrough technology.

# Are low-carbon investments too small to make a significant impact?
Pierre Abadie: No, in my opinion, this idea is outdated. In 2023, investments in low-carbon energy exceeded $2 trillion1, more than doubling what’s spent on fossil fuels and surpassing 2018’s decarbonisation investments. I believe this shift is comparable to the Industrial Revolution and is expected to grow, with projections showing that two-thirds of energy spending will go toward low-carbon solutions in the next decade.