14 Dec 2021

Podcast: Racing to Net Zero, with Iberdrola


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This document is reserved and must be given in Switzerland exclusively to Qualified Investors as defined by the Swiss Collective Investment Scheme Act of 23 June 2006 (as amended from time to time, CISA).

In this episode of One Step Ahead, our host Libby Potter focuses on the role energy producers can and should play in the race to “Net Zero” emissions. 

The key date is 2050, enshrined in the Paris Agreement, which commits nearly 200 countries to contain global warming at a maximum of 1.5°C above pre-industrial levels. One company well on its way in the low carbon transition is Spanish electric utility Iberdrola.

Whitelee wind farm

Isabel Sánchez Herrero, Head of Investor Relations at Iberdrola, explains why the company is already 20 years ahead of the curve, and reveals its plans to help secure our planet’s future.

From increased investments in renewables, to smart grid development, to the exciting potential of green hydrogen, the opportunity set for companies and investors willing to make a difference looks promising.

Below are a few edited highlights from the episode. You can listen to the full episode on your favourite podcast platform (including Spotify, Apple Podcasts, Google Podcasts, Stitcher) or right here on the Lyxor ETF website:

Libby: It seems that “net zero” is all that anyone has been talking about over the course of 2021, from governments, to companies, to investors. How important is the “net zero” mission to Iberdrola, and what targets do you have in place to get there?

Isabel: (…) We need to get to net zero in just 30 years from now. And we need to reduce global emissions by at least 45% by 2030. So we need to think beyond COP 26, and take action right now to take the net zero ambitions into our reality.

At Iberdrola we’re really committed to this. We’ve been doing this for years, and we think that reducing emissions is not only good for the environment and for society, it’s also good for the economy, for business and for communities. Because just imagine – if you reduce emissions you improve air quality and health, but you also create economic activity and sustainable growth.

You also need to transform these declining industries into decarbonised industries that are here for the future. This transformation has to take place right now, and it will require massive investment; not only in renewable energy, but also in electricity networks – we need them to connect these renewable facilities, and also to provide resiliency and quality of service.

Libby: Iberdrola describes itself as a company that’s “20 years ahead of the current energy transition”. Why is that the case, and where has that led your company to today?

Isabel: Yeah Libby you’re right, we started this 20 years ago. Now there’s a strong consensus about decarbonisation and going green. But at that time, we had to convince regulators, governments and other market agents that this was the right way to go.

Since the year 2000, we have invested almost €120bn in renewable energy. As a result, we’ve gone from being a local Spanish utility with coal and fuel oil to the global, green company that we are now. In the last two decades, we have decommissioned 8,500 MW (megawatts) of fuel oil and coal generation capacity, decreasing our level of emissions to below 100g CO2/kwH (kilowatt-hour). It’s important to mention that because other utilities or peers are calling themselves green, but right now they’re going back to producing electricity with coal, and we are not.

With this path we took 20 years ago, we have increased our renewable capacity four times, and we’ve become coal-free, reducing our emissions by 72%. The average of our peers is three times higher. (…)

puertollano green hydrogen

Picture source: https://www.iberdrola.com/about-us/lines-business/flagship-projects/puertollano-green-hydrogen-plant

Libby: The EU is putting energy transition right at the heart of its strategy. What do you expect from the European Green Deal and the NextGenerationEU recovery plans in terms of renewed investments into your business?

Isabel: The EU has a great ambition in the energy transition, and they have this NextGeneration recovery plan which is their instrument for recovery from the coronavirus pandemic. Their aim is to mitigate the social and economic impact that this pandemic has had. It would make European economies and societies more sustainable, resilient and better prepared for these challenges we have ahead of us with the digital and green energy transition. (…)

These funds are not going to be allocated to mature technologies – on the contrary, they will invest in projects that need support and subsidies to accelerate their competitiveness. These could be sustainable mobility, green hydrogen, heating pumps or all these newer technologies. So they represent a good opportunity for us because they will accelerate our efficiency and competitiveness. But they’re not part of our current plans, so they will be on top of our plan, and our current investment plan is not going to be modified because of this.

Libby: So you’re one of the biggest producers of wind power in the world, but it’s not without its challenges – ecological and social issues arising from the use of wind power in fishing and tourism for example. Can you talk about how these might be overcome in the future?

Isabel: Every activity that humans carry out has an impact. Renewable energy is not an exception. The thing is it can have an impact on tourism, but we’ve seen certain reports that say that tourist decisions on whether to visit a place or not is not impacted by whether there’s a wind farm there or not. Also, there can be a positive side to that – there could be no negative impact, and even in some cases like in Whitelee, a wind farm we created, there are more than 130km of trails to explore on foot, by cycle or by horse. 

Whitelee wind farm

So we decided to create a visitor centre to promote tourism.

With regards to fishing, the windmills themselves create certain reef habitats that are protected because fishers cannot go there, and there’s a lot of fauna created around these offshore wind farms.

Photo: Whitelee Wind Farm, Scotland, developed and operated by ScottishPower Renewables (a subsidiary of Iberdrola).

To learn more about the role of energy producers in the race to Net Zero – including the impact of a rapidly rising carbon price, and ways for their corporate and retail customers to measure and minimise their own carbon footprint – listen to the 20-minute episode of One Step Ahead.

Relevant ETFs

As one of the few major utilities in the world producing electricity with a carbon intensity of less than 100g CO2/kwH – the ‘green’ threshold as defined by the EU Taxonomy – Iberdrola is not only eligible for some of our ETFs tracking EU Climate Transition Benchmarks (CTB), it may also be found in those tracking the more ambitious Paris-Aligned Benchmarks (PAB).

At the time of this podcast recording, Iberdrola was held in the following SFDR 9 compliant funds:

Equally, Iberdrola was held in our SFDR 8 compliant Lyxor MSCI Europe ESG Leaders (DR) UCITS ETF whose underlying “best-in-class” index targets companies with the highest ESG profile relative to their sector peers.

Finally, as the world’s largest non-financial corporate issuer of green bonds, Iberdrola was also a holding in the following SFDR 9 compliant green bond ETFs:

Learn more about our Climate equity ETFs

This podcast is for informational purposes only, and should not be taken as investment advice and/or an offer to buy financial products. Lyxor International Asset Management, holding the brand Lyxor ETF, does not in any way endorse or promote any companies or securities mentioned in this show. The opinions expressed at the time of recording do not necessarily reflect the views of Lyxor ETF or its parent company, Societe Generale, and may vary from time to time.

This article is for informative purposes only, and should not be taken as investment advice. Lyxor ETF does not in any way endorse or promote any companies mentioned in this article. Capital at risk. Please read our Risk Warning below.

Key risks of Lyxor ETFs
It is important for potential investors to evaluate the risks described below and in the fund prospectus which can be found on lyxoretf.com

CAPITAL AT RISK: ETFs are tracking instruments: Their risk profile is similar to a direct investment in the Underlying Index. Investors’ capital is fully at risk and investors may not get back the amount originally invested.

REPLICATION RISK: The fund objectives might not be reached due to unexpected events on the underlying markets which will impact the index calculation and the efficient fund replication.

COUNTERPARTY RISK: With synthetic ETFs, investors are exposed to risks resulting from the use of OTC swaps. In-line with UCITS guidelines, the exposure to a swap counterparty cannot exceed 10% of the total fund assets. Physically replicated ETFs may have counterparty risk if they use a securities lending program.

UNDERLYING RISK: The Underlying Index of a Lyxor ETF may be complex and volatile. When investing in commodities, the Underlying Index is calculated with reference to commodity futures contracts exposing the investor to a liquidity risk linked to costs such as cost of carry and transportation. ETFs exposed to Emerging Markets carry a greater risk of potential loss than investment in Developed Markets as they are exposed to a wide range of unpredictable Emerging Market risks.

CURRENCY RISK: ETFs may be exposed to currency risk if the ETF is denominated in a currency different to that of the Underlying Index they are tracking. This means that exchange rate fluctuations could have a negative or positive effect on returns.

LIQUIDITY RISK: Liquidity is provided by registered market-makers on the respective stock exchange where the ETF is listed, including Societe Generale. On exchange liquidity may be limited as a result of a suspension in the underlying market represented by the Underlying Index tracked by the ETF; a failure in the systems of one of the relevant stock exchanges, Societe Generale or other market-maker systems; or an abnormal trading situation or event.

CONCENTRATION RISK: Some ETFs, e.g. thematic and Smart Beta ETFs, select stocks or bonds for their portfolio from the original benchmark index. Where selection rules are extensive it can lead to a more concentrated portfolio where risk is spread over fewer stocks than the original benchmark


This document has been provided by Lyxor International Asset Management that is solely responsible for its content.


Lyxor Net Zero 2050 S&P World Climate PAB (DR) UCITS ETF - Acc


Lyxor Net Zero 2050 S&P Eurozone Climate PAB (DR) UCITS ETF - Acc


Lyxor Net Zero 2050 S&P Europe Climate PAB (DR) UCITS ETF - Acc


Lyxor MSCI Europe ESG Climate Transition CTB (DR) UCITS ETF - Acc


Lyxor MSCI World Climate Change (DR) UCITS ETF - Acc


Lyxor MSCI Europe ESG Leaders (DR) UCITS ETF - Acc


Lyxor Green Bond (DR) UCITS ETF - Acc


Lyxor Corporate Green Bond (DR) UCITS ETF - Acc


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