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1. Sustainable World
Summit
For investment professional use only and not for general public distribution
Two Superpowers: the Impact
of China and the US

2. Who is to “blame”?

3. Sustainable World Summit
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0
2
4
6
8
10
1750 1800 1850 1900 1950 2000
China is the world’s biggest emitter
Carbon dioxide (CO2) emissions from the burning of fossil fuels for energy and cement production (billion t)
Source: Global Carbon Project.
Note: CO2 emissions are measured on a production basis, meaning they do not adjust for emissions embedded in traded goods.
 China
 United States
 EU-27
 India
 Russia
 Brazil
 South Africa
 United Kingdom
2020

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0 100 200 300 400 500
US
China
Russia
Brazil
Indonesia
Germany
India
UK
Japan
Canada
Fossil fuels Land-use change
Total emissions are only one side of the story
Per capita and cumulative emissions data paint different pictures
Territorial emissions per capita over time Historic emissions
Largest cumulative CO2 emissions 1850-2021, billions of tonnes
Note: Excludes emissions from international travel and emissions from land-use change.
Source: Global Carbon Project / Our World in Data. Source: Carbon Brief, The Times and The Sunday Times.
Per capita Cumulative CO2 emissions by world
0
5
10
15
20
25
1990 1996 2002 2008 2014 2020
China Europe India United States

5. The journey so far

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China and US climate pledge comparison
Source Fidelity International, 2021.
Target
Greenhouse gas
Emissions reduction
Net-zero emissions
Clean energy build up
USA
Reducing its net greenhouse gas emissions
by 50-52 percent below 2005 levels in 2030
Reach net zero by no later than 2050
To reach 100 percent carbon pollution-free
electricity by 2035
China
To peak carbon emissions by 2030
Achieve carbon neutrality before 2060
To bring its total installed capacity of wind and
solar power to over 1.2 billion kilowatts by 2030

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US federal government catching up on environmental
sustainability
US Climate Adaptation Plan has been established by President Biden
Source: US Environmental Protection Agency, October 2021.
The National Climate
Change Adaption Plan
Integration
(Including plans from the
Autonomous Communities)
Evaluation of
sectors and systems
Evaluation and generation
of scenarios
Evaluation in
climatic regions
training communication
The National
Climate Council
Interministerial Group on Climate Change
evaluation participation
The Coordination Commission
of Climate Change Policies
Tourism
Health
Fishing
Energy
Biodiversity
Agricultura
Finance
Water
Other Sectors
Current Climatic Conditions
Regional
climatic
scenarios
Current
socio-economic
conditions
Regional
socio-economic
conditions
Cantabric
Coast
Pyrenees
Mediterranean
Coast
Plateaus Other regions

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Advancing sustainability on all fronts
State Government and
Regulators
 California: 2013 launched
the nation’s first economy-
wide carbon market
 SEC: Working toward a
comprehensive ESG
disclosure framework
Capital Markets
Green tech development
and innovative business
models driving changes:
 Tesla
 Beyond Meat
US sustainable fund assets
reaching new milestones
Civil Society
Think tanks and NGOs are
pushing ESG integration
at all levels of society’
and setting global ESG
reporting standards
 Ceres
 SASB
 IFRS Foundation
Consumers
 Consumers claim that
ESG issues are more
important to them than their
shopping habits indicate
 However, many consumers
are unknowledgeable about
sustainability practices in
industries like fashion
 Likelihood to consider
ESG is higher among
the youngest consumers

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China has a vested interest in reaching sustainability targets
Impact of climate change: Flooding in the Yangtze river
 Asia, in particular China, will be a
critical part of any global solution to
climate change
 >80% of China’s carbon emissions
are from power generation and
industry sectors
 Solar / wind power and efficient
grid transmission can address
>50% of China's carbon emissions
9

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China rolling out policies across all fronts to tackle
climate change
Green Buildings
 Improved China Three-Star
Green Building rating
system to raise building
energy efficiency standards
 National regulations now
require that 70% of China's
new urban buildings include
certified green buildings by
2022
Carbon Price
 China’s national emissions
trading scheme (ETS) has
begun operating in July
2021 after 10 years of
piloting
Green Finance
 China’s central bank
released a new set of
assessment measures for
green financing undertaken
by banking sector financial
institutions
 China's central bank rolled
out low-cost lending tool to
financial institutions for
carbon emission cuts
Green Transportation
 Imposed a mandate on
automakers requiring that
electric vehicles (EVs) make
up 40% of all sales by 2030
 By 2025, the average
electricity consumption of
new electric passenger cars
in China will drop to 12.0
kWh/100 km

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Progress made on renewable energy and green buildout
China intends for its emissions to peak by 2030
Asia Leads China’s wind and solar installation 2007 - 2019
0.3
1.2
2.6
6.2
6.9
9.2
21.1
34.3
60 167.6 GW
Central American & Carribean
Middle East
Africa
Eurasia
Oceania
South America
North America
Europe
Fossil Fuel Plants
Asia
Source: International Renewable Energy Agency (IRENA). Source: BNEF, IRENA, FIL analysis
0%
10%
20%
30%
40%
50%
0
20
40
60
80
2007 2010 2013 2016 2019
China annual installation (GW)
As % of global installation (RHS)
Almost two-thirds of renewable power built in 2020 was
constructed in Asia

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However, both countries are falling short of what’s
required for 1.5 degrees
USA overall rating: INSUFFICIENT China overall rating: HIGHLY INSUFFICIENT
Source USA | Climate Action Tracker, updated Sept 2021. Source: China | Climate Action Tracker, updated Sept 2021.
*Modelled domestic pathways reflects a global economic efficiency perspective with pathways for different temperature ranges from global least-cost models.

13. The path forward

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Decarbonisation is the largest investment theme of our era
The economic ramifications will be powerful and wide reaching
Source: Fidelity International, 2021. 1Goldman, 2020. 2Energy & Climate Intelligence Unit, 2021. 3ThredUP, 2020 resale report. 4Fidelity internal analysis, 2021. 5Climate Tech VC, 2021.
Decarbonisation
 Full decarbonisation of the global economy,
at current costs has a price tag of $4.8tn per
year, totalling $144tn total by 20501
 This is 7x current US GDP
 70% of women are open to shopping
second-hand; resale expected to be
bigger than fast fashion by 20293
 Global EV volumes to increase >16X
by 2030, influenced partly by an in
increase in consumer demand4
 Innovative technologies will disrupt a wide
range of business models, across sectors.
We are at the inflection point of change
 In the first half of 2021, climate tech start ups
raised $16bn across c.250 ventures; c.50%
more climate deals in Q2’21 vs. Q2’205
 61% of countries have committed to net zero2
 Ambitious 2030 targets
 European EU Green Deal (€1trn)
and c.$200bn green stimulus in
recent $1trn US infrastructure plan
Accelerating regulatory push
Changing consumer behaviour
Accelerating innovation
Scale of investment required

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Requirements for global decarbonization
Key pillars of decarbonization Clean energy investment in EMs: Current vs Future
Source: Net zero by 2050 – A Roadmap for the Global Energy Sector (windows.net) Source: Financing Clean Energy Transition in Emerging and Developing Economies (windows.net)

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The roles of
China and US
Source: CNN photo illustration/Getty Images/Adobe Stock

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