Schroders' global investment article states that energy transition provides a radically different risk exposure and risk premium in investment portfolios compared to diversified infrastructure. The unique return drivers of energy transition infrastructure may lead to excellent investment performance. Furthermore, as a rapidly growing industry in the global infrastructure sector, energy transition infrastructure offers significant opportunities and inherent attributes to reduce sustainability risks, further supporting the argument for diversification benefits and strengthening portfolio resilience in this asset class. There are highly attractive investment opportunities in the global energy transition. The International Energy Agency estimates that annual investments in energy transition will be around $4.5 trillion from the early 2030s, almost triple the record level in 2023. Allocating funds efficiently to energy transition is crucial for high-performance investment portfolios, for three main reasons. 1. Energy transition infrastructure investments are fundamentally different from other investments. Annualized returns and risk data from 2014 to 2024 show that the overall long-term risk and return characteristics of energy transition infrastructure are broadly similar to general infrastructure investment portfolios, contradicting the common belief that diversified infrastructure investment portfolios have lower risks. Compared to non-energy infrastructure subsectors and other asset classes, the risks associated with energy transition infrastructure are highly diversified, and investors will face a unique risk premium combination, including inflation, electricity prices, resources or weather, technology, as well as geographic or policy risks. This risk premium combination brings diversification benefits, as indicated by the data. Furthermore, the correlation of energy transition infrastructure with all asset classes (including diversified infrastructure) is very low, even negative with equities and fixed income assets that have strong economic cyclicality. Therefore, while the overall long-term risk and return of energy transition infrastructure are historically broadly similar to traditional infrastructure, their potential patterns and driving factors are fundamentally different. This indicates that even replacing diversified infrastructure with energy transition allocation could bring positive diversification benefits to investment portfolios. 2. Energy investments are becoming increasingly focused in the infrastructure sector. The growth of energy transition assets in the infrastructure market is expected to require new capital for the next 20-30 years to establish a new global sustainable energy system to meet significantly increased energy demand. In terms of investment volume, energy is the largest industry to date, with renewable energy being the largest energy subsector and the largest single infrastructure sector, accounting for 48% of all investments in the past 15 years. The growth of renewable energy investment opportunities is critical as it also affects pricing. The energy industry needs continuous incentives and attraction of funds to meet growing demand, and funds are needed at every stage of the investment lifecycle. In many cases of developer cash shortages, the need to release funds through the sale of operating assets is particularly evident in today's market, prompting sellers to actively sell assets and thereby supporting strong returns. 3. If sustainability risks can be avoided, why accept them? Any economic transition cannot avoid fluctuations, and energy transition may experience shocks during the process. During periods of soaring energy prices and inflation, energy transition assets perform well. During the 2022 Russia-Ukraine conflict and related energy security issues, global electricity prices and inflation surged, while energy transition infrastructure investment strategies performed well, with other asset classes generally struggling; stocks and bonds experienced negative returns for the first time in half a century.