Citi花旗銀行：2024可持續(xù)轉(zhuǎn)型報告-釋放財政的力量（英文版）

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SustainableTransitions

UnleashingthePowerofTreasury

CitiGPSincollaborationwithCitiServicesAugust2024

Citiisoneoftheworld’slargestfinancialinstitutions,operatinginallmajorestablishedandemergingmarkets.Acrosstheseworldmarkets,ouremployeesconductanongoingmulti-disciplinaryconversation–accessinginformation,analyzingdata,developinginsights,andformulatingadvice.Asourpremierthoughtleadershipproduct,CitiGPSisdesignedtohelpourreadersnavigatetheglobaleconomy’smostdemandingchallengesandtoanticipatefuturethemesandtrendsinafast-changingandinterconnectedworld.CitiGPSaccessesthebestelementsofourglobalconversationandharveststhethoughtleadershipofawiderangeofseniorprofessionalsacrossourfirm.Thisisnotaresearchreportanddoesnotconstituteadviceoninvestmentsorasolicitationstobuyorsellanyfinancialinstruments.FormoreinformationonCitiGPS,pleasevisitourwebsiteat/citigps.

CitiGPS:GlobalPerspectives&SolutionsAugust2024

JenniferWainerisHeadofSustainability&ESGforTreasury&TradeSolutionsatCiti.Sheisresponsiblefordefiningandexecutingaclient-centricsustainabilitystrategyacrossTrade&WorkingCapitalSolutions,LiquidityManagementServices,andPayments,andaligningthebusinesstoCiti’snetzerocommitments

andsustainabilitygoals.ShejoinedServicesinMarch2023fromCiti’sMarketsbusiness.ShestartedatCitiin2009.ShereadNaturalSciencesatDowningCollege,Cambridge.

+442079864741|jennifer.wainer@

JasonChannellisHeadofSustainableFinancewithinCitiGlobalInsights.JasonpreviouslyledCiti’s

SustainableandResponsibleInvestmentResearchteamtoa#1rankingintheInstitutionalInvestorsurvey.JasonstartedhiscareeratFidelityInvestments,andbeforejoiningCitiin2011workedforGoldmanSachs.Jasonistheleadauthorofsomeofthemost-readCitiGPSreports,coveringallaspectsofsustainability,HeholdsadegreeinEngineeringScienceandManagementfromtheUniversityofDurham.

+44-20-7986-8661|jason.channell@

YingQinisaglobalthematicanalystwithinCiti’sGlobalInsightsdivisionworkingprimarilyonESGand

sustainability-relatedtopics,andcurrentlyleadsworkonnatureandgender.PriortojoiningCitiin2018,YingworkedatChathamHouseintheEnergy,EnvironmentandResourcesprogrammeandhasaPhDin

sustainabledevelopmentfromtheUniversityofCambridgewhichfocusedonintegratednaturalresourceuseandgovernanceinChina.

+44-20-7986-8325|

ying.qin@

AndreaFlemingisaseniorassociatewithinCiti’sGlobalInsightsfocusedonsustainabilityand

responsibledevelopment-relatedcontent.AndreahasheldvariousrolesacrosstheinvestmentlifecycleincludingtimeonsovereignfixedincomeandESGresearchteamsataglobalassetmanagerandheryearsofexperienceinprivateandcommercialcredit.Andreaholdsamaster’sdegreeinquantitative

economicsfromUniversityofCalifornia,LosAngeleswherehergraduatethesisfocusedontherelationshipbetweensovereigncreditspreadsandcountryESGratings.

+44-20-7986-8326|

andrea.fleming@

ElizabethCurmiisHeadofClimateFinance&EnergyTransitionwithinCiti’sGlobalInsightsdivisionworking

ondevelopingthought-leadershipcontentonsustainabilityandESG.BeforejoiningCiti,sheworkedasa

postdocresearcherattheUniversityofCambridgefocusingontheinterconnectionsbetweenwater,energy,andfoodresourcesandtheirimpactsongreenhousegasemissions.Lizhaspublishedseveralacademicpapersandhasco-authoredsomeofthemost-readCitiGPSreports.LizhasaPhDinenvironmental

economics.

+44-20-7986-6818|elizabeth.curmi@

MartinaGarabedian

Sustainability&ESG

Treasury&TradeSolutions,Citi

RonChakravarti

GlobalHead,ClientAdvisoryServices,Citi

DrDuncanCole

Digital&Partnerships,ClientAdvisoryServices,Citi

MichaelWood

HeadofRevenueGeneratingAnalytics,TTS

Services,Citi

RohitKakkar

RevenueGeneratingAnalytics,TTSServices,Citi

PritamChowdhury

RevenueGeneratingAnalytics,TTSServices,Citi

HelenHKrause,CFA

HeadofCitiGlobalInsights(CGI)

EmmanuelLevy

DataScientist

CitiGlobalInsights(CGI)

AmyThompson

SocialEconomistCitiGlobalInsights

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August2024CitiGPS:GlobalPerspectives&Solutions

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ShahmirKhaliqHeadofServicesCiti

SUSTAINABLETRANSITIONS

UnleashingthePowerofTreasury

ThemodernTreasuryandFinanceoperationhassomuchmoretoofferany

forward-lookingorganization.Itsimpactshouldextendbeyondtraditionalcore

competenciesofstakeholderandbusinessecosystemmanagement,financing

(workingcapitalmanagementandliquidityoptimization),andmonitoringand

reporting.Treasuryhasacrucialroletoplayincriticalcapabilitiesincludingreal-

timetreasuryprocessdigitizationandincreasingly,anexpectationofsupportingthecompany’ssustainabilitystrategy.

Sustainabilityencompassesnotonlythecurrentissuesattheheartofbusinessresilience,butmoreimportantly,thedefiningtransformationalandgrowth

opportunitiesofourgeneration.

Fromopportunitiesthatdefinebusinesses,toKPIsthatcanquantify,monitor,andmanagethem,totargetsthroughsupplychainsandprocurement,toensuring

liquidity,accesstocapital,andthecostofthatcapital–nofunctionisbetter

positionedtounderstand,promote,anddrivechange,bothwithinthecompanyandacrossbroaderbusinessecosystems.

Inthisreport,twopiecesofproprietaryresearchwereconductedinconjunctionwithCiti’sServicesbusiness.

Inourfirstanalysis,wefoundthatcompanieswiththemostsophisticatedtreasuryoperationstendtobethemostadvancedintheirsustainabilityjourney.

Oursecondpieceofanalysislooksatnet-zero-alignmentacrossthesupplychainsof1,500companies,highlightingtherisksofsupplychainlock-outand,conversely,theopportunitytodrivebroadersystemicchangeviainnovativefinancial

instrumentssuchassustainablesupplychainfinance.Thisprovidesacompellingexampleofthepowerofanengagedtreasury,andhowitsuniquevisibilityand

influenceacrossbusinessecosystemsandsupplychainscanmanageandmitigaterisksanddrivesystemicchange.

ThisreportprovidestheintellectualgroundworkthatTreasuryandFinanceneedtoengagewiththeorganizationaboutitsroleinmovingtowardsamoresustainablefuture.Welookatthisinastructural,strategicsense,andthefinancialinstrumentsthatcanbedeployedtobringthatstrategytolife,demonstratinghowtreasury’s

earlieranddeeperengagementcanreducerisk,improveaccesstocapital,andembraceopportunity.

'SustainableTransitions:UnleashingthePowerofTreasury'highlightswhythe

treasurymustbecentraltoanysuccessfulsustainabletransition,andwhyitneedstobeinvolvedfromthestart–shapingthediscussion,ensuringscrutinyofthefacts,andmaintainingrigorinimplementation.Asalong-termpartnertotreasuryatthe

world’sleadingcompanies,welookforwardtoaccompanyingyouonthisexcitingjourneytoamoreresilientandsustainablefuture.

Treasury&Sustainability

No.ofcompanies

Whydoesitmatter?

Sustainabilitythemesremainmaterialtocorporates,andtreasuryisakeystakeholderinanycorporate’ssustainabilityjourney.Themoresophisticatedtreasuriesenjoybetterfinancialperformanceandalsotendtobemoreengagedwithclimateissues.

Companyrevenue,earningsandROICasafunctionoftreasuryperformance706

Neartermtargets(Committed&TargetsSet)Longtermtargets(TargetsSet)

Netzerocommitted

30

327

20

191

10

2510

0

Bottom25%Middle50%Top25%

Source:CitiGPS,CitiServices

5yearearnings($billions)

SophisticatedtreasuriesaremoreoftenalignedtoNetZero

Bottom25%25-50%50-75%75-100%

5yearrevenues($billions)

2022ROIC

465

40

50

Supplychainrisksandopportunities

Ouranalysisfindsthatformanyindustries,thelargestpurchasersofgoodsandserviceshavescience-basednetzerotargetsbuttheirsupplychainsdonot.Treasuryisuniquelyplacedtoinfluencesupplychainsviainstrumentssuchassustainablesupplychainfinance.

DeltabetweenBuyeralignmentandSupplieralignmenttoSBTI

iers

gnedd

Buyersmalignedt

ppliersyerSBT

oreSBTIhansuppl

SBTIAliiAligne

Su.Bu

●●

●

Sup。alig

eSBTIbuyers

●●

pliersmornedthan

0%10%20%30%40%50%60%70%80%

Technology

Communications

DiversifiedIndustrialsHealthcare

DiversifiedServices

MobilityChemicals

Paper&Packaging

BuildingProducts&MaterialsTransportation

RealEstatePower

Aerospace&DefenseMetals&Mining

CleanEnergyTransitionEnergy

PublicSector

throughSustainable

SupplyChainFinance

solutions

RisksandOpportunities:ABuyer’sPerspective

Opportunitiesforsupplierengagement

Opportunities

forpreferential

pricing

misalignmentwithsupplychain

GHGcomplianceriskarisingfrom

Supplier1(NotSBTIAligned)

Riskofsupplychainlockout

Supplier2(SBTIAligned)

Buyer

(SBTIAligned)

Downstream

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Sustainablefinancesolutionsalongthesustainabilityjourney

Sustainablefinanceisavehicle,notadestinationandcanbeusedformitigatingrisks,buildinglong-termresiliency,improvingsustainableperformance,andcapturinggrowthopportunities.

Traditionaltreasuryareaoffocus

Stakeholdersandbusinessecosystems

Supplychainsupanddownstream:Expandedtreasuryinfluenceacrossbusinessecosystems

SustainablefinanceframeworksandKPIs

?SelectionofsustainabilityKPIsandlinkingmeasuresofsuccesstofinancing

?Earlyengagementenablesarobustsustainablefinanceframework

Sustainableinvestmentstrategy

?IntegrationofESGcriteriaininvestments,

useofsustainabledepositsolutionsandmoneymarketfunds

?Alignmentofbankingpartnerstosustainabilitystrategy

Sustainabilitymitigations

?Integratingcarbonoffsetsandremovalsintofinancingsolutionse.g.directinvestmentinprojects,purchasingofcredits,PPAs

Procurementstrategy

?Leveragingsustainablesupplychainfinancingsolutions

?Tradeandworkingcapitalsolutionsi.e.tradeloansforsustainableprocurement

?Linkingdocumentaryservicesi.e.lettersofcreditandguaranteestocarbonfootprintofthegoodpurchasedorsold

?Linkingpaymentflowsdatatocarbonfootprintofgoodspurchased

Sustainableoperationsobjectives

?Workingcapitalsolutionscanfacilitateefficienciesinresourceusageandoperationalemissionsandenvironmentalfootprint

Businessgrowthopportunities

?Low/zerocarbonandnature-positiveproducts,services,businessmodels,revenuestreams

?Geographicopportunitiesduetogreentaxesandincentives

Financing:Expandedtreasuryinfluenceandengagement

Monitoringandreporting

RisksandOpportunities

StrategyincTargets

Impacts/Materiality

Corporatepurpose

Implementation

Financing

3

6

5

4

2

1

Actionitemsforcorporatetreasury

Treasuryoperationsarealsowellplacedtohaveamaterialinputintoallstagesofbuildinganddeliveringacompany’ssustainabilitystrategyandinourview,mustbeengagedtobesuccessful.

Financingstrategy

?Linkfinancingtostrategy,ecosystemandmetrics

?Growthandtransition

?Tradeandworkingcapitalsolutions

?Investmentsandliquidity

?Tradingandriskmanagement

Reporting

?Strategy

?Risksandopportunities

?Metrics,milestonesandtargets

?Ratings,regulators,frameworks

?Financing

?Feedbackloops

Businessecosystems

?Supplychains

?Procurement

?Customerengagement

?Counterparties

?Peers

?Regulators

?Financingpartners

Engagement

?Strategy

?Risksandopportunities

?Metrics,KPI’sandmonitoring

?Targetsandmilestones

Metrics,dataandKPI’s

?OperatingKPI’s

?StrategicKPI’s

?Financingmetrics

?Supplychaindata

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Contents

Introduction7

Whysustainabilitystillmatters11

Thecorporatesustainabilityjourney20

Expandingtreasury’sremit,impactandcontributionthrough

thelensofsustainability27

Conclusions48

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Introduction

Theworldofbusinesshasbecomeamorechallengingplaceinrecentyears,pushingsustainabilityontothebackburnerforsome.

Butarewebacktoaworldofcold,hard‘Friedmanesque’economics,whereprofittrumpsall,orshouldsustainabilitystillbeattheheartofcorporatestrategy?Andifso,howdoweimplementitsuccessfully,withafullyengagedandalignedfinancingstrategy?

Therealityisthatmanyofthechallengeswefacecurrentlyareinfactreflectionsofsustainability-relatedissues;fromfoodpriceinflationandsecurity,toinequalityandthecostofliving,toenergysecurityandpricing,togrowth,employment,tariffsandprotectionism.

Butnotonlyissustainability(andresilience,tolookatitadifferentway)stillattheheartofcurrentissues,itencapsulatesthekeylonger-termmegatrendswhichwilldrivetheeconomy,societyandtheenvironment,andhenceimpactbusinesses,

overthecomingdecades,fromtheenergytransition,tochangesinmobility

solutions,totheemploymentthatmightsufferfromtheintroductionofAI,andtheexcitingnewindustrieswhichwillbecreated.

Steppingbackfromtheselonger-termtransitionsrunstheriskofbeingleftbehind.Wethinkthedirectionoftravelforthesemegatrendsisclear,andahistoricanalysisoftippingpointshighlightsthatwhenwetip,wetendtodosofasterthanexpected,andcompletely.Topersistwith‘unsustainable’(inthedictionarysense)modelsrunstheriskofsimplyinvestinginstrategiesandinassetswhichwillultimatelybecomestranded.

Moreover,historyalsotellsusthattheseshorter-termdislocationsoftenleadtoa

longer-termaccelerationoftheunderlyingsustainabilitytrend;thesamewasastrueintheenergycrisesofthe70s,asitistoday,withareneweddriveforenergy

securityandinsulationfrompricevolatility.

Thisposesasignificantriskforanycorporatesthatareoverlyattentivetoshorter-termissuesattheexpenseoflonger-termtransitions;theyrisklosinggroundtotheirpeers,andatworsthavinginvestedinstrandedassets.

Ratherthansimplylookingatwhysustainabilitystillmatters,thisreportisabouthowtobuildaneffectivesustainabilitystrategy,andhowandwhyanengagedtreasuryandfinanceoperationiscriticaltosuccess.

Thebackboneofthisreportisformedbytwopiecesofproprietaryresearch,conductedwithCiti’sServicesbusiness.

ThefirstbuildsonpreviousworkbyCitiServicesClientAdvisoryteamandothers,incomparingtreasurysophistication(viaCitiTreasuryDiagnosticssurvey)to

corporateengagementinnetzerocommitmentsandtargets(bothlongandshort-term)asaproxyforbroadersustainabilityengagement.

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Figure1.SophisticatedtreasuriesaremoreoftenalignedtoNetZero

Source:CitiServices

Theresultsbackupthecentralhypothesisofthisreport–thatcorporateswiththemostsophisticatedtreasuryoperationsalsotendtobemoreadvancedintermsofsustainabilityalignment.

Havingdemonstratedthisalignment,wethenlayoutaseriesofstepstobuildinganintegratedsustainabilityandfinancingstrategy,whichhasanengagedtreasury

operationatitsheart.

Wedothisbymeansofacorporatesustainabilityjourney,buildingoncorporate

purpose,throughrisks&opportunities,strategy,targets&milestones,implementationandreporting.

Wealsoexaminewhichstakeholderswillbecriticaltoworkwithalongthisjourney.Treasuryoperationsaremoretraditionallyinvolvedinthelatterstagesofthis

journey(e.g.financingandreporting),butaspertheresultsofthefirstpieceof

analysis,weidentifytheopportunitiesfortreasurytobemuchmoreengagedintheearlierstages-bringingtheiruniqueinsightsintomateriality,

KPIs,supplychainsandbusinessecosystems,risksandopportunities,accesstopoolsofcapital,thecostofthatcapital,andofcoursegovernanceexpertise.In

short,weexaminetheopportunityofexpandingtreasury’sremit,impact,influenceandcontributionthroughthelensofsustainablefinance.

Thesecondpieceofproprietaryanalysislookingatbusinessecosystemsprovidesanessentialcasestudy.Inaworldwhereascope3mentalityisbecomingever

moreprevalent,itisafallacytobelievethatanycorporatecanreachitsnetzerotargetswithouttheengagementofitssupplychain,andindeeditscustomers.

Putsimply,ifacorporatehasascope3netzerotarget,itssuppliersruntheriskof

supplychainlock-outiftheyarenotmovingintandem.Inthisreport,weexaminesupplychaininterlinkagesforthelargest100buyersacross17industries(1,598ofthelargestcompaniesfromadatasetof102k),andtheirsupplychains(65,805suppliers),and

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buyer/supplieralignmentto8,910companiesintheScienceBasedTargetsinitiativedatabase,toexaminetheextenttowhichsuppliersarealignedwithcustomers.

Theresultsaretelling–formanyindustries,thelargestpurchasersofgoodsandserviceshavescope3netzerotargets,buttheirsupplychains(fromanyindustry)donot.

Figure2.DeltabetweenbuyeralignmentandsupplieralignmenttoSBTi

Source:CitiGPS,CitiServices

Thismismatchisparticularlyacuteinthetech,communications,industrialsandhealthcarespaces,wherebuyersareleadingboththeirsupplychainsandotherindustrybuyersinsettingscience-basedtargets.

Thishighlightsanimportantexampleofthebenefitsoftreasuryengagementandalignmentearlieroninthesustainabilityjourney-treasurycanofferuniqueinsightsintobusinessecosystemrisk.Moreover,itmakesthepointaboutconnectinga

company’ssustainabilityobjectivestosustainablefinance;treasuryisalsouniquelyplacedtoinfluencethesesupplychainsandbusinessecosystemsviainstrumentssuchassustainablesupplychainfinance(SSCF).

Beyondthis,welookatnumerousotherformsofsustainablefinance,suchasUseofProceedsinstrumentslikegreenorsocialbonds1,throughthebroadergeneral-corporate-purposefinancingsuchasKPI-linkedinstruments.Welookat

procurement,tradeandworkingcapitalsolutions,paymentflowsdata,sustainabledeposits,tax(credits),andnewinstrumentssuchascarboncredits,tonamebutafewopportunities.

Havingdemonstratedthelinkagebetweenthemostsophisticatedtreasury

operationsandsustainability,andhighlightedonekeybusinessriskwhichcanbe

identifiedandmanagedbytreasury,welayoutaseriesofpracticalsteps,aswellas

1AccordingtotheInternationalCapitalMarketsAssociation(ICMA),asocialbondisauseofproceedsbondwhichraisesfundsforneworexistingprojectsaddressingormitigatingspecificsocialissuesand/orseektoachievepositivesocialoutcomes.Agreenbondisalsoauseofproceedsbond;theICMAgreenbondprinciplesseekto‘supportissuersinfinancing

environmentallysoundandsustainableprojectsthatfosteranet-zeroemissionseconomyandprotecttheenvironment.

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potentialfinancingvehicles,bywhichtheforwardlookingandengagedtreasurycanplayamuchgreaterroleinacomprehensivecorporatesustainabilitystrategy.

Weseesustainablefinanceasavehicletocreateanewgenerationofmorebroadlyengagedtreasuryoperations,withafullseatatthetableintermsofstrategy

formulationandimplementation.

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Whysustainabilitystillmatters

Thereisnodoubtthattherecentenergycrisis,inflation,lacklustergrowthandthespecterofstagflation,ifnotthefearofrecession,hascausedcorporates,investors,governmentsandindividualstofocusonmorepressingissues,likekeepingthe

lightson,themortgagepaid,orfoodinourbellies.

Addtothisfactorssuchastheimpactofdollardenominateddebtonemerging

marketsandcapitaloutflowsfromemergingmarkets(wheremuchoftheinvestmentintheenergytransitionisrequired),economiesburningmorecoal,andtraditional

energycompaniesscalingbackgreenambitions,andyouhaveatoughbackdropforESGandsustainability.

Figure3.ChallengingenvironmentforESG

Source:CitiGPS

Sustainabilityattheheart

Thereislittleargumentthat‘ESG’neededtoevolvefromwhatwasforsomeinthepasta‘ticktheboxexercise’whichrewardedtransparencyoverbusinessimpactandreal-worldoutcomes.However,thethemesencapsulatedbythebroader

conceptofsustainabilityincreasinglymakeupthemegatrendspositionedtodrivetheeconomy,society,politics,business,andtheenvironmentoverthecoming

decades.

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Figure4.Sustainabilityattheheartofcurrentissues

Source:CitiGPS

Whereverwelook,ifwethinkaboutthebiggestchallengesandopportunitiesfacingtheglobaleconomy,society,andtheplanetbothnowandinthecomingdecade,theyareencapsulatedbysustainability.ThisissupportedbyWorldEconomicForum’s2024

GlobalRisksReport.Forexample,extremeweatherwascitedasthesecond-highestriskgloballyfor2024,movingtothenumberonespotintheten-yearhorizon.

Figure5.Currentrisklandscape

Source:WEFGlobalRisksReport2024

AnotherwaytoillustratethisistheUNSustainableDevelopmentGoals.For

example,ifwebreakthemintothematicbuckets,weseethatenvironmentalissuessuchasclimatechangeremainfrontandcenter,whilesocialissuessuchasthe

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cost-of-livingcrisis,poverty,andinequality,encapsulatedbyfoodsecurity/foodpriceinflationandrisingenergycosts/energysecurityremainhighonthepolitical,

economic,andsocialagendas.

Sowhilewemightagreethat‘ESG’needstocontinuetoevolve,sustainability

remainsacriticalissueforusall,notleastforbusiness,andattheheartofourcurrentchallenges.Ignoringthesemegatrendsandtheireconomic,political,andsocialimpactsisfraughtwithrisk.

Lessonsfromhistory

Historytellsusthatwhileshort-termdislocationscanslowthepaceoftransition,theyoftenresultinalonger-termaccelerationofthesetrends.

Theearly‘70sprovideanalmostperfectfacsimileofrecentevents–aworldin

economicturmoildrivenbyanenergypriceshock(the‘73oilcrisis),itselfdrivenbyaconflict,whichledtofoodpriceinflation,higherlevelsofinflationgenerally,andsubsequentlyrisingratestotrytotacklethatinflation,aswellasthecollapseoftheBrettonWoodsSystemandresultingFXvolatility.

Geopoliticaltensionsrose,andalongsidethis,industrialunrestincreased

dramaticallywithwidespreadstrikeactionincountriesliketheUK,culminatingintheso-called‘winterofdiscontent’.Therewerealsolong-termeffects,withvariouspolicyinitiativeslaunchedthatcontinuetoshowtheirimpactstoday.

Longer-termimplications

Followingtheenergycrisisof1973,thedesireforenergysecurityandtolimit

exposuretoenergypricevolatilitydrovenumerouspoliciesaroundtheworld.OneofthehighestprofilepolicieswasNixon’s‘ProjectIndependence’,whichasthe

namesuggestsaimedtoincreasetheUS’senergyindependence(theoriginalplan,thoughunsuccessful,targetedenergyindependenceby1980).Inessenceit

attemptedtoimproveenergyefficiencyanddevelopnewsourcesofenergysuchasnuclear,oil&naturalgas(includingshale),aswellascoal,andincreasedenergy-relatedR&D,allofwhichwoulddriveAmericanenergyindependence.

Asitturnsout,Nixon’sdreamwasoneofthelesssuccessfulresultingtransitions,andUSenergyindependencewasn’ttofullymaterializeuntiltheshaleboom

facilitateditin2019.

More‘successfully’,inFranceitdrovetheso-calledMessmerplan(namedaftertheFrenchprimeministerofthetime)wherebyadesireforenergyindependence

versusahistoryofalmostentirelyimportedenergycommodities,droveashiftinFrance’senergysystembecomingalmostentirelynuclear(alegacywhichisstillmuchthecasetodaythoughrenewablesarenowmakingsignificantinroads).

Anotherinitiative,theProálcoolprogramlaunchedinBrazil,entailedhigherblendingrequirementsforbioethanol,reachingupto100%today,reducingthecountry’s

dependenceonoilimportsandexplainingwhymanyofBrazil’sdomesticautosrunonethanol.

Theselonger-termimplicationswerenotlimitedtotheenergycomplex,butalso

resonatedthroughindustries.Theenergycrisesofthe70slaidthefoundationsforthetransformation(andrelativedecline)oftheUSdomesticautomanufacturingindustry,asconsumerstransitionedfromtraditionallylarge,bigengineUS-

manufacturedautostosmaller-engine,moreeconomicalimportedvehiclesfromJapanandWestGermany.

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Short-termheadwinds,longer-termtailwinds

Sowhilethesedislocationscanprovidechallenges,theymayactuallyacceleratefundamentalshifts,which