Financing sustainability projects is one of the biggest hurdles to scaling green initiatives globally because they require large initial capital investment, and the returns are often long term.
Investor confidence is impacted by market volatility, political instability, technological uncertainty and fluctuations in the policy and regulatory environments (ie. inconsistent carbon pricing). In addition, the lack of standardized ESG (Environmental, Social, and Governance) metrics and transparent reporting can make it hard to assess a project’s viability leaving the investor to see financing green projects as too risky.
However, traditional financial systems are working to catch up with the needs of sustainable development. More institutional investors are aligning portfolios with sustainability goals and investors are interested in supporting green initiatives as illustrated by the uptake in Green Bonds which saw global issuance reached over $500 billion in 2023.
Read how one insurance company is evolving its tools to address the lack of insurance solutions for projects that drive sustainability and the energy transition.
