By Jean-Philippe Desmartin, Head of the Responsible Investment Team at Edmond de Rothschild Asset Management (France)
Following our previous editorials, “Cheaper, baby, cheaper” and “Jobs, baby, jobs,” the latest developments in the war in Iran have brought the urgent need for energy security in Europe and elsewhere to the forefront. In China, the initial announcements last March regarding the 15th Five-Year Plan (2026–2030) continue to emphasize renewable energy, electrification, and energy storage, but also look ahead to e-fuels and hydrogen. These Chinese programs have industrial, environmental, and security/sovereignty ambitions.
In Europe, contrary to the misguided notions of subsidizing fossil fuels or undermining the CO2 emissions market, the choices made since the start of the war in Ukraine in favor of energy efficiency, renewable energy, and the electrification of end-use applications contribute not only to the energy and environmental transition but also to energy security and sovereignty. The all-fossil-fuel approach currently advocated across the Atlantic is hardly an option for Europe, given the risks of dependency posed by current events, where oil and natural gas supplies are proving to be “intermittent.” To put this into perspective, proven reserves located in Europe (Norway, the United Kingdom, Romania, etc.) amount to 6 years of the continent’s current natural gas consumption and 2.5 years for oil.
In short, sharply rising oil and natural gas prices serve as a price signal and an economic catalyst to accelerate the transition and reduce the share of fossil fuels in Europe’s energy mix, shifting toward electricity. According to a report by Strategic Perspectives, electrifying 50% of the European economy (which is currently 23% electrified) would halve oil imports and reduce fossil fuel imports by two-thirds by 2040.
One caveat, however, is worth noting: European countries have highly diverse electricity mixes. In 2025, 48% of the EU’s electricity generation came from renewables (including hydropower), 23% from nuclear, and 29% from fossil fuels (primarily natural gas). While France, Spain, Portugal, and the Nordic countries already benefit from electricity that is largely low-carbon and competitive, this is not the case for the United Kingdom, Germany, or, even more so, Italy.
Enjoy your reading!
Summary:
• News: Disinformation: a global economic cost of $417 billion by 2024
• From an academic point of view: Responsible shareholders: an influential minority? A study of shareholder engagement at TotalEnergies by Nicolas Mottis and Leo Denis
• Company meetings: Focus on Getlink
• Recommended reading: Material World: The Six Raw Materials That Shape Modern Civilization
• The responsible investment team in action: Corporate dialogue & engagement - A focus on quality and effectiveness, rather than quantity and ‘box-ticking’