How the Fourth Industrial Revolution Will Accelerate Decarbonization

Key Takeaways

  • Digitalization, electrification and decarbonization (the “DED nexus”) are powerful agents of positive change for societal and environmental sustainability goals.
  • As technology improves and connectivity progresses, the fossil analog economy will transition toward a renewable electric digital economy.
  • We consider this to be the Fourth Industrial Revolution and view decarbonization as a generational investment trend that will have a profound impact on almost every sector of the global economy.

For the last 250 years, since the beginning of the Industrial Revolution, humankind has made tremendous progress using a fossil fuel-driven economic growth engine. Unfortunately, tremendous industrial progress has not come without consequences for the environment, and today, the world today relies heavily on the use of carbon-emitting processes in everyday life, such that it would be hard to live without them. In essence, the fossil economy has been woven into our global economic system and detangling the web of carbon-emitting processes is no easy feat.

A Decade of Transformational Change

But the transition to a low-carbon economy seems finally to be accelerating, and we believe we are entering a decade of transformational change. Much of it will be driven by the convergence of two powerful trends: electrification and decarbonization. As electrification continues to develop, everything will become “smart” and connected, blurring the lines between sectors and industries.

Electrification of the global automotive fleet is one area we are particularly excited about. As battery and computing technology continue to improve and associated costs decrease, we expect to see mass production and adoption of electric vehicles.