In a global investment landscape that at times appears rife with uncertainty and beset by bubbles and busts, two main areas stand out both as pockets of opportunity and as major forces for change: sustainable, responsible and impact (SRI) investing—that is, investment that considers environmental, social and governance criteria as well as returns—and financial technology, or fintech, which is revolutionising how financial services are delivered.
The call for a 100% renewable energy future is gaining widespread support. It is a clear and simple concept, which expresses perfectly the ambition signaled by countries in signing of the 2015 landmark Paris Agreement. Holding global average temperature rise well below 2°C, not to mention a much safer limit of 1.5°C, requires nothing short of the complete decarbonisation of the energy sector. But the world is a complex place; what works in one country doesn’t necessarily work in another. Finding solutions for some sectors is easier than for others. The stakes are high – financially, environmentally and socially – and as the transition progresses, there will be clear winners and losers.
The solar and wind power industries must raise trillions of dollars in the decades ahead to achieve the scale of older, more established energy sources. While investment in solar and wind power has grown in recent years, reaching a record $270 billion in 2015, such investment declined by roughly 16% to $226 billion in 2016. Solar and wind developers often struggle to obtain adequate financing on competitive terms.
This paper is focused on climate-related investment in developing countries. It provides the reader with an overview of climate-related activities, clarifies the terminology and discusses the sources of finance and public support
The supply chain is the new frontier in environmental responsibility – an area rich with opportunity that remains mostly unexplored, where a number of pathfinders are starting to show others the value that can be found. Large public and private sector organizations have enormous purchasing power, often engaging with thousands – or tens of thousands – of direct and indirect suppliers. By harnessing the power of their procurement decisions it is possible for them to cascade their own commitments throughout the supply chain.
87 of the world’s leading companies are now members of RE100, creating demand for around 107 Terawatt hours (TWh) of renewable electricity – around the same amount of power consumed by the United Arab Emirates or The Netherlands. 34 leading businesses have joined RE100 in the last year, reflecting an increasing recognition of the business case, and the vital role that companies play in expanding the market for renewable energy. While growth has historically been focused around the US and Europe, 2015-16 saw RE100 welcome members from China and India, with favorable policy environments opening up new opportunities for corporate leadership in these regions.
Renewable energy set new records in 2015 for dollar investment, the amount of new capacity added and the relative importance of developing countries in that growth. All this happened in a year in which prices of fossil fuel commodities – oil, coal and gas – plummeted, causing distress to many companies involved in the hydrocarbon sector. So far, the drivers of investment in renewables, including climate change policies and improving cost-competitiveness, have been more than sufficient to enable renewables to keep growing their share of world electricity generation at the expense of carbon-emitting sources.
Investing in sustainable infrastructure is key to tackling three simultaneous challenges: reigniting global growth, delivering on the Sustainable Development Goals (SDGs), and reducing climate risk. Following the milestone achievements of 2015 – including the ambitious global goals set for sustainable development and its financing in Addis Ababa and New York, and through a landmark international agreement on climate action in Paris – the challenge is to now to shift urgently from rhetoric into action.
This includes assurance that companies are lowering their risk exposure to policies that place a price on carbon and reallocating capital to deliver higher returns in a low-carbon economy. This report provides investors, companies and governments with an overview of how companies are responding to carbon pricing signals within the global economy
There are three key barriers to the growth of rooftop solar power in India: the high upfront costs of installation, low access to debt finance, and perceived performance risk. One promising solution to manage these barriers is the third party financing model. This paper explores the driving factors and challenges to the third party financing model, and proposes a series of recommendations for policy changes and financial instruments which could address these challenges.
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13 March 2018
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