A 2022 report from McKinsey suggests that the transition to net zero by 2050 will cost around USD275 trillion in spending on physical assets. That equates to USD9.2 trillion in annual average spending – or, in other words, USD3.5 trillion more than today. To give a sense of scale, the report draws attention to the fact that this increase is equivalent to half of global corporate profits and one quarter of total tax revenue in 2020. As introduced previously, investors will play a big role in financing this, and fixed income has the potential to deliver a much-needed allocation of capital.