Reaching net-zero will require massive shifts in policy and investment, challenging the credit profiles of debt issuers in sectors exposed to this shift, said Moody's recently.
"We expect emissions reduction policies to become more stringent in many major economies over the next several years," said Colin Ellis, a Managing Director at Moody's. "This could pose downward pressure on the credit profiles of companies operating in sectors most exposed to such policy shifts."
In addition, net-zero policies and associated investment will create opportunities for renewable energy, construction, and certain mining companies that produce metals required for carbon transition.
Moody’s in a recently published report compares net-zero policy approaches across China, the EU and the US, noting variations driven by differences in their economies, policy priorities and policy frameworks.
The EU is ahead of the US and China in implementation, but reaching net-zero will be challenging for all three regions because it will require a profound transformation of their economies and a sizable investment, the credit rating agency said.