You say you want an energy transition?: Well, we all want to see the value created

By Helena Anderson and Roberto Castiglioni — Ikigai Group

The Romans — who knew a few things about technology advancement — used to say “in medio stat virtus“: virtue stands in the middle. This principle is something we’ve always applied in life and it infuses all of our work at the net zero bankability consultancy, Ikigai Capital.

We believe that balancing multiple virtues, finding compromises (or better yet, win-wins) between the four main stakeholders in the energy transition — consumers, technological innovators, financial institutions and governments — is the only way we can achieve our sustainability objectives.

This article was originally published in Enlit Europe’s Guide to season 3 — A just transition.

Authors Image credit Ikigai Group

What does this actually mean in practice? For example, notwithstanding huge social (and now legal) pressure, it would be quite naà¯ve to think that large oil and gas companies can divest from billions of investment just because we have to decarbonize.

Besides the fact that shareholders expect to have their investment remunerated, millions of people are employed in the industry and all our economies still depend heavily on fossil fuels for materials, industry and transportation.

Transition implies change, radical change in this case, and radical change cannot happen overnight, nor can it leave economic disparities or insecurity.

We need to move billions of dollars from a fossil fuel-driven economy to the future green economy. To do so, we need to show social value and convenience, deliver industrial competitiveness and productivity, and improve profitability equal to or in excess of the traditional energy sector.

We also need to consider that large fossil fuel producers do not operate on an island; they operate in an ecosystem that depends on them, with large financial interests at stake. If we want to deliver a just transition, we need to consider the ecosystem as a whole and take a systems approach to stakeholders and infrastructure delivery.

The same concept applies to the demand side of emissions reduction, which, in our opinion, has been comparatively neglected.

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