Collectively, the energy and industrials sectors have a heavy carbon footprint. For these sectors, identifying the investments most likely to lower this impact is a priority.
With climate change rising rapidly up the agenda, energy and industrials sectors have to lower their carbon footprint, which accounts for about 75% of global greenhouse gas emissions. BCG worked with OGCI Climate Investments, a voluntary CEO-led initiative—whose members account for about 30% of global oil and gas production—to ensure that its $1 billion climate fund could maximize the impact of its investments.
The fund was set up to invest in technologies and solutions to lower the carbon footprint of energy and industrials. It focuses on three areas:
To maximize the impact of its fund, OGCI Climate Investments needed to refine its investment strategy and identify a set of investment pathways within its three focus areas.
To determine the total potential impact the fund could make, BCG worked with the initiative to assess the emissions footprint for different sectors and value chains along four dimensions: technological solutions, demand, business models, and infrastructure.
BCG assessed whether technological solutions already existed. We evaluated the current state of demand, whether from the market or driven by policy. We also investigated whether an existing business model could be used to deploy the technology and whether the necessary infrastructure and supply chain structures were established.
The fund already had in place investment strategies that went beyond the initial technology investments. It wanted to target its investments toward solutions to other barriers holding back scaled deployment models such as CCUS.
BCG supported the fund in designing a framework to measure the emissions impact of its portfolio and its investment pathways and developed a dashboard enabling it to visualize its portfolio along key strategic dimensions. This tool can be used both to assess opportunities and evaluate the fund’s investments.
For the fund’s CCUS investment strategy, BCG supported its preparations for the CCUS investment day, helping to develop and refine the narrative so that it could attract interest from the financial community.
The project created a comprehensive scoping and assessment of the levers and opportunities needed to achieve impact within the fund’s three investment focus areas.
“Strategic pathways” were prioritized. These aimed to use the fund to support market conditions by removing barriers to the development of business models, infrastructure, and demand, and to support technology breakthroughs.
BCG provided OGCI Climate Investments with a framework enabling it to assess opportunities and their potential impact on emissions. It also created a dashboard that allowed the fund to visualize its portfolio along key strategic dimensions.