Different types of carbon risk
Carbon risk is not a single concept. It includes policy risk, technology risk, market design risk and reputational risk. Each of these can affect cash‑flows and valuations across the energy value chain.
Green technology as a hedge
Low‑carbon technologies – renewables, storage, efficiency, electrification – can provide a partial hedge against future increases in carbon costs or tightening regulation. The key is to understand how each asset responds under different policy and price scenarios.
Blending physical and digital assets
Many investors now combine physical green assets with digital optimisation platforms, data services and software. This can improve returns and resilience, particularly when assets operate in congested or fast‑changing systems.
Role of high‑quality analysis
Superficial “green” labels are not enough. Robust due diligence requires bottom‑up analysis, scenario modelling and a clear view of how policy and technology pathways affect future cash‑flows.