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The End is Near for Dirty Energy: Fossil Fuels are Being Abandoned by Investors, Insurers and Banks

February 03, 2020 Add Comment Edit

“I’m done with fossil fuels. They’re done. They’re just done. We’re starting to see divestment all over the world.” - CNBC’s Jim Cramer

The fact that investors, insurance companies and banks are abandoning the fossil fuel industry is a clear sign that coal, oil and gas are in the final stage of their energy dominance. Those who refuse to come to terms with this fundamental reality will by punished financially and in the court of public opinion.

Jim Cramer is a stock market pundit and he sees the writing on the wall. "I’m done with fossil fuels. They’re done. They’re just done. We’re starting to see divestment all over the world," Cramer said on CNBC. He also said the industry is in the "death knell phase" comparing them to the tobacco industry before its collapse. "You’re seeing divestiture by a lot of different funds. It’s going to be a parade."

According to the Guardian, a report at the end of last year concluded that coal-fired power stations were, "on the way to becoming uninsurable". At least 35 insurers have begun pulling out of coal investments. The number of insurers withdrawing coverage for new fossil fuel projects has more than doubled over the last year.

Fossil fuels are not only imperiling life on the planet they are also bad investments. Despite one of the most bullish stock runs in decades, the share prices of many major oil companies are falling short of expectations. Even if they were providing stellar returns it is hard for investors to justify supporting an industry that augurs death.

"I think we’re at the point in the global warming story where anyone with an eye to history might want to ask, 'Do I really want to be trying to profit off the wreckage of the planet?'" said environmentalist and 350.org co-founder Bill McKibben. "Also, considering how badly the fossil fuel sector is underperforming the economy, politicians might want to ask themselves, 'Do I really want my constituents to think I’m this bad at managing my money?'"

According to a 2019 study published in Nature Energy, the energy return on investment (EROI) for fossil fuels is not what many believe. While a ratio of 25:1 is a commonly sited EROI for fossil fuels, this study suggests it is closer to 6:1 putting them in line with renewable energy. As the study's co-author told Bloomberg "The transition from fossil fuels to renewables actually might not be as bad as people thought," he said.

By 2016 it was becoming clear that divestment was a serious and growing movement. This became irrefutable when in 2017 the world's largest equity investor, Norges Bank Investment Management ("NBIM"), Norway's $1 trillion sovereign wealth fund, announced that it was selling its $35 billion stake in oil and natural gas stocks. As of 2020 most investors now accept that fossil fuels are terminal.

BlackRock, the world’s largest asset management firm, has recently announced that it is launching new investment products that screen fossil fuels. BlackRock CEO Larry Fink used his most recent annual letter to warn of a "significant reallocation of capital". With more than $7 trillion in assets under management, this represents a seismic shift in the investment world. Goldman Sachs announced it wouldn’t fund drilling in the Arctic National Wildlife Refuge and they have signaled that they intend to decrease their financing of of new coal-fired power projects and diversify away from the fossil fuels.

Riksbank, Sweden's central bank has sold off bonds from parts of Canada and Australia due to concerns about fossil fuels. Reuters reported that Riksbank Deputy Governor Martin Floden said the bank would no longer invest in assets from issuers with a large climate footprint, even if the yields were high. "As a result of the new investment policy, we sold our holdings of bonds issued by Alberta in the spring. For the same reason, we have recently sold our holdings in bonds issued by the Australian states of Queensland and Western Australia," Floden said.

It looks as though 2020 will be they year that the shift away from fossil fuels goes mainstream. The European Investment Bank (EIB), the EU’s lending arm said as of the beginning of this year they will no longer finance fossil fuel projects. In 2017 The World Bank pledged to stop funding oil and gas projects beyond 2019. As reported by Reuters Matthew Green, a total of 130 banks worth $47 trillion are moving away from fossil fuels. This includes Deutsche Bank, Citigroup, and Barclays, all of which have adopted UN backed climate policies that would shift them away from fossil fuels to align them with the 2015 Paris Agreement. Other banks to join the "Principles for Responsible Banking" initiative included Danske Bank, ABN Amro, BNP Paribas, Commerzbank, Lloyds Banking Group and Societe Generale, according to a statement.

The fossil fuel industry is indeed dying, but unless they end quickly they may still take us all with them.

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Green Banks Leverage Private Investments for Climate Finance

June 17, 2016 Add Comment Edit

In addition to creating new jobs and improving the environment Green Banks are essential to ramping-up clean energy finance. Such banks are capable of helping to unleash the vast potential of climate focused investing. Green Banks reduce the cost of clean energy and efficiency. They are helping to change market thinking by taking a holistic, long-term view of industry support.

A Green Bank is a government-created institution that facilitates private sector financing for clean technology projects. Different Green Banks have different programs, however, they all leverage public funds to attract private investment.

In addition to providing capital and information these banks encourage private sector investments by helping to mitigate risk. They also help to standardize financial products to make them easier to buy and sell.

The tools used by Green Banks include low-interest or longer-term loans, interest rate buydowns, project equity stakes, small grants, and, as the market develops, credit enhancements.

In the US there are a number of Green Banks including the New York City Energy Efficiency Corporation, the Connecticut Green Bank, the Hawaii GEMS Program and the New Jersey Energy Resiliency Bank.

Internationally Green Banks include the UK Green Investment Bank, the Japanese Green Finance Organization, the Australian Clean Energy Finance Corporation, GreenTech Malaysia.

For years we have watched Green Banks contribute to meaningful climate progress by supporting things like renewables and energy efficiency initiatives.

The potential of green investment banking is huge, however governments can contribute to or detract from this laudable initiative.

As reported by the Independent exactly one year ago, the government in the UK announced plans to sell off part of the first bank in the world established to make money out of environmentally sustainable projects.

Launched by the government in 2012, the UK's Green Investment Bank will be privatized in a move that is expected to generate £1 billion. However, Chuka Umunna, the shadow business secretary, said the bank would be destroyed by privatisation. “It is unclear how the GIB can continue to perform its unique and vital function if it is sold off and it would be incredibly short-sighted if the important role it currently plays was lost,” he said.

In 2014 the Green Investment Bank backed 22 new energy projects worth £2.5 billion and generating enough energy to power 4.2 million UK homes.

As reported by Business Green in 2014, an investment Bank boss said that the UK's Green Investment Bank could mobilize £60 billion if government allows it.

Banks are an important part of creating the necessary infrastructure to support the transition to a low carbon economy. One high profile example is EV charging stations. While electric vehicles are an important part of the transition, green banks can support charging infrastructure which is essential to the widespread adoption of EVs.

As reported by Energy Manager Today, a study by the Center for Climate and Energy Solutions (C2ES) indicates that banks play a key role in the transition to a low carbon economy. This includes both expanding EV infrastructure and clean energy.

As reported by Sustainable Business, the first "Green Bank Academy" was attended by leaders from over 11 states including California, Hawaii, Illinois, Kentucky, Maryland, Massachusetts, Minnesota, New Hampshire, Washington, NY and Connecticut.

Green Banks can help fill the financing gap in the absence of government leadership. Mark Muro from the Brookings Institution, co-host of the Academy explained that Green Banks contribute to, "large-scale progress on big problems when the national government has gone absent."

In 2014 US Green Banks committed to spending $15 billion on energy Projects over 5 years. This investment could be leveraged to over US $40 billion in private investments. Here is a brief review derived from an EDF article on the major Green Banks in the US.

Connecticut's Green Bank

In 2012, Connecticut created the first green bank, known as Clean Energy Finance and Investment Authority or CEFIA. As reported by the EDF, CEFIA’s 2013 annual report indicates that for every dollar of ratepayer funds CEFIA invested, roughly $10 was invested by private sources. Much of this investment was focused on clean energy building upgrades that are part of Connecticut’s Property Assessed Clean Energy program. CEFIA also has an innovative financing solution for solar projects on commercial properties. In 2014 Connecticut's Green Bank (CEFIA), financed 1,160 projects and attracted over $180 million in private capital based on $41 million in state funds, resulting in 26.7 megawatts of new clean energy.

New York’s Green Bank

New York has the largest green bank in the US, with $1 billion in funding. Launched in 2013, New York’s Green Bank focuses on advancing the clean energy market by encouraging business partnerships.

Hawaii's Green Bank

Hawaii's Green Bank called GEMS launched in 2014 with a $150-million green bank called GEMS, that focuses on social justice. The program allows homeowners to finance solar projects that significantly reduce their power costs.

California's Green Bank

In 2014 California introduced a Senate bill that laid the groundwork for attracting private capital for a green bank that launched in 2015.

New Jersey's Green Bank

In 2014, Governor Chris Christie announced plans to launch an Energy Resilience Bank. Though technically not a green bank, the Energy Resilience Bank has proposed using federal Superstorm Sandy funds to finance the resiliency component of infrastructure projects that strengthen the state’s electricity grid during extreme weather events.

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World Bank to Finance More Renewables in the Developing World
Innovative Solar Financing Instruments
Drivers of Green Investment Growth
New Sustainability Focused Finance Instruments
Opportunities in Sustainability Finance Highlighting Renewables & Energy Efficiency
The Panama Papers Highlight the Need for Sustainability
A World Bank Action Plan to Combat Climate Change
European Commissioner for Climate Action Urges Development Banks to Divest from Fossil Fuels

Green Finance Goes Mainstream in 2016

April 18, 2016 Add Comment Edit

The world is embracing green finance as never before and all expectations are that this will increase as we move towards a low carbon economy. Financial systems should play an important role in the green economic transition said, Zhou Xiaochuan, the Governor of the People's Bank of China. Zhou was speaking at the Green Finance Symposium which took place on Saturday, April 15th in Washington.
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After years of volatility, green finance is emerging as a central part of our efforts to address climate change and transform our energy infrastructure. Green finance is preoccupied with adapting to the impacts of climate change and/or reducing greenhouse gas emissions. It is the means by which we can stream tremendous amounts of needed capital into emissions free sources of power.

Although a precise definition of green finance (GF) is somewhat elusive, generally speaking it can be understood as sustainable investment and banking, where investment and lending decisions are taken on the basis of environmental considerations. This applies to both the public and the private sector and it specifically entails environmental screening and sustainability focused risk assessment.

For years, GF was dismissed as being too risky. Now in the wake of the signing of the Paris climate accord, lenders cannot ignore the economics of climate action that make clean energy an attractive opportunity. Governments began seriously investing in clean technologies in 2005. However, the early years were fraught with challenges, not the least of which was the economic crisis of 2007 – 2008. Nonetheless, between 2005 and 2010, there was a 200 percent increase in the growth of GF.

There is well warranted optimism that 2016 will be the year in which green finance comes of age. Governments, businesses and global organizations are all getting on-board to make this a landmark year for GF.

In an article published in the Huffington Post, Nick Robins, the Co-Director of the UNEP Inquiry into a Sustainable Financial System, said:

"From a strategic perspective, 2015 built a new set of policy foundations for the global economy, signaling new directions for the financial system…So, if 2015 designed the foundations, the task for the financial community in 2016 is to take the practical steps to deliver the reallocation in capital that’s required, and doing this in ways that result in an orderly transition in global markets."

At a G7 meeting last summer, the world’s leading economies agreed to phase out fossil fuels. At this meeting, Angela Merkel said the leading industrialized countries were committed to raising $100 billion in annual climate financing by 2020 from public and private sources.

According to a new report, green finance has what it takes to deliver decisive climate action. The report says that GF is capable of keeping temperatures from rising beyond the upper threshold limits of 1.5 to 2 degrees Celsius set in the Paris climate accord. The report was produced by a partnership between Bloomberg New Energy Finance, Ceres and Ken Locklin of Impax Asset Management. The report, titled Mapping the Gap: The Road From Paris, finds that there is enough money in the global economy to finance the transition to clean sources of energy.

We have gleaned valuable insights about the feasibility of GF from a number of pilot projects. A report from the Climate Investment Fund (CIF) shows that green finance works. The report titled, "Learning by Doing: The CIF’s Contribution to Climate Finance," studied GF in 48 countries. CIF oversees more than $8 billion, which it uses to support projects in cleantech, forests, climate resilience and renewable energy.

This year, the Green Climate Fund has come of age and there are now a wide range of initiatives that support the growth of GF, including the SDGs and a rapidly growing green bond market. The IMF is now focusing on climate change and the World Bank along with the IBD are contributing to the funding of clean energy in the developing world.

The G20 has indicated that it is committed to green finance. Mark Carney, the Governor of the Bank of England and Chairman of the Financial Stability Board, has said that GF has grown up and it is no longer a “niche”. In March, Carney said that in a bid to mainstream climate friendly funds, the G20 will make green finance a "priority". The G20 has explored the concept through its Green Finance Study Group and the subject will receive special attention at September's G20 meeting in Hangzhou.

Many governments are gearing up to get involved with GF and some nations have already implemented policies. As reported by Bloomberg, Indonesia plans to limit the ability of banks to lend money to projects that are deemed environmentally destructive. While this is a move will curb slash and burn agricultural practices in the country, it can be applied to any set of environmental parameters. A May 2015 WWF report stated that there are four major banks in Indonesia, Malaysia and Singapore that have embedded environmental factors as part of their credit-decision process. Last fall, the Association of Banks in Singapore introduced guidelines on responsible financing.

A 2016 UNEP report titled, "The Financial System We Need," declares that the UK is a global hub for GF. London’s financial community is positioning themselves to lead green finance, while Hong Kong and Singapore are already leaders in GF.

As explained by Achim Steiner, Executive Director of the United Nations Environment, "2016 is set to be the year of green finance. Across the world, we are seeing a growing number of countries aligning their financial systems with the sustainability imperative."

Governments, financial institutions, investors and businesses have been pouring capital into clean energy at ever increasing rates. After a protracted period of intense volatility, green finance has finally arrived. It is now an unstoppable global force that is helping to build a clean power infrastructure.

Source: Global Warming is Real

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Opportunities in Sustainability Finance Highlighting Renewables & Energy Efficiency
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A Large and Growing Chorus is Calling for an End to Fossil Fuel Subsidies

Green Bonds Emerging as a Major Force in Green Finance

April 14, 2016 Add Comment Edit

The momentum driving green bonds is growing and they have emerged as a major instrument of green finance. Green bonds generate funding for sustainable development and clean energy technology. They attract debt investment capital and drive innovation in renewable energy, sustainable agriculture, forests and other environmental causes. At COP21 green bonds were touted as being one of the vehicles that could help deliver $100 billion annually by 2020 to support of climate action.

A 2014 HSBC report indicates that we will need to see $300 billion a year in investments to keep us below the upper threshold limit of 2 Celsius. If even a fraction of the $80 trillion bond market moved to environmental finance, it could tip the scales in the climate fight, says Angus McCrone, Chief Editor for Bloomberg New Energy Finance.

According to Ceres, we need to invest around $1 trillion each year in clean energy projects worldwide by 2050 to ensure that global warming is limited to 2 degrees Celsius.

The first green bonds were issued in 2007 by development banks. As of 2012 we were seeing investments of around $2 billion, by 2013 that grew to $11 billion and by 2014 it was around $36 billion. In 2014 three green bond indexes were launched (S&P Green Bond Index; Bank of America; Barclays Bank and index creator MSCI).

In 2015 there was $42 billion worth of green bonds issued. These bonds have grown quickly over the past few years and as reported by the EDF, in 2016 they are forecasted to reach about $50 billion.

Green bonds have become a powerful means for corporations to broadcast their environmental credentials. Apple issued $1.5 billion in bonds earlier this year dedicated to financing clean energy projects at its facilities worldwide. New York Metropolitan Transportation Authority issued $500 million in green bonds and Georgia Power issued $325 million to support investment in renewable energy.

As reported by Sustainable Business, in 2015 the World Bank issued $3.1 billion in green bonds including $600 million in fixed-rate 10-year green bonds. The Oslo Stock Exchange began listing green bonds. SunEdison's yieldco TerraForm Power, issued $800 million for 8-year junk bonds. Other top issuers were European Investment Bank with $5.6 billion in Climate Awareness bonds, German Development Bank KfW with $3.5 billion and GDF Suez with $3.4 billion. Toyota issued $1.75 billion, French Development Bank AfD issued $1.3 billion and Iberdrola issued $1 billion in green bonds. Vestas wind energy also issued green bonds.

"We are convinced that green bonds play an important role in unlocking the green market capital that is necessary to finance the transformation to a cleaner and more sustainable future," states Stefan Reiner, Director in Corporate Finance and responsible for the bond business of German development banks,

Mexico has successfully used green bonds as a financing mechanism to reduce emissions. In 2014 the Huffington Post reported that Africa will issue one billion in green bonds. In March 2015 the first Green Bond issued in Asia easily raised $500 million.

Some early concerns related to green bonds are being addressed including the lack of standardization. In January 2014 a group of leading banks took preliminary steps to create standardization in the market by issuing something called Green Bond Principles. As explained by Ceres’ Mindy Lubber: "As standards get stronger, we’ll see more growth in the market."

Groups such as Green Bond Principles and the Climate Bonds Initiative are giving investors the tools they need. To see a report and guide from Lloyds Bank on green bonds click here.

Green bonds are a game changer. Growth in the green bonds sector is evidence that banks are starting to see the potential of low carbon infrastructure projects. If a fraction of the 80 - 90 trillion bond market were diverted to green bonds it would significantly advance climate finance.

Related
Green Finance Goes Mainstream in 2016
The Green Climate Fund Comes of Age
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World Bank to Finance More Renewables in the Developing World
Innovative Solar Financing Instruments
Drivers of Green Investment Growth
New Sustainability Focused Finance Instruments
Opportunities in Sustainability Finance Highlighting Renewables & Energy Efficiency
The Panama Papers Highlight the Need for Sustainability
A World Bank Action Plan to Combat Climate Change
European Commissioner for Climate Action Urges Development Banks to Divest from Fossil Fuels
A Large and Growing Chorus is Calling for an End to Fossil Fuel Subsidies

IDB to Double Climate Related Projects

April 13, 2016 Add Comment Edit

In October last year Inter-American Development Bank (IDB) announced that it is going to double its climate related projects by increasing financing by between 25 and 30 percent by 2020. The IDB was established in 1959, it offers long-term financing for economic, social and institutional development in Latin America and the Caribbean.

As reviewed in an October, 2015 press release, starting in 2018 the bank will begin screening projects for climate risks and resilience. This will ensure that money invested goes towards environmentally sustainable projects and achieves the stated goal of helping these countries to meet their INDC targets.

The IDB is working with private sector finance to provide financing for adaptation and resilience. As a newly consolidated entity the IDB will offer innovative financial products, such as green bonds.

Historically the IDB has devoted 14 percent of its financing to climate related projects between 2012 and 2014.

Related
Green Finance Goes Mainstream in 2016
Green Bonds Emerging as a Major Force in Green Finance
The Green Climate Fund Comes of Age
The Climate Investment Fund's Low Carbon Development
World Bank to Finance More Renewables in the Developing World
Innovative Solar Financing Instruments
Drivers of Green Investment Growth
New Sustainability Focused Finance Instruments
Opportunities in Sustainability Finance Highlighting Renewables & Energy Efficiency
The Panama Papers Highlight the Need for Sustainability
A World Bank Action Plan to Combat Climate Change
European Commissioner for Climate Action Urges Development Banks to Divest from Fossil Fuels
A Large and Growing Chorus is Calling for an End to Fossil Fuel Subsidies

World Bank to Finance More Renewables in the Developing World

April 11, 2016 Add Comment Edit

After being called out for hypocrisy, the World Bank is working to redeem itself through massive investments in renewable energy. The International Monetary Fund and the World Bank Group are holding their annual "Spring Meetings events" in Washington, DC, on April 12-17, 2016. It will be attended by thousands of government officials, journalists, civil society organizations, and participants from the academia and private sectors. The meetings will feature seminars, regional briefings, press conferences, and many other events focused on the global economy, international development, and the world's financial markets.

The World Bank has repeatedly warned of dramatic temperature increases and has called for bold action and countries to adopt aggressive targets to cut greenhouse gas emissions. In 2013 World Bank President, Dr. Jim Yong Kim, pledged that the bank will do everything it can to address climate change. The bank has been looking at business through a "climate lens" he said and he further suggested that we include the cost of carbon in energy pricing (carbon pricing) and end fossil fuel subsidies.

While the bank supports renewable energy, they have been criticized for simultaneously supporting fossil fuels. Between 2008 and 2013 the bank provided US$18 billion, or almost half of its energy lending, for fossil fuels and coal in particular.

This is at odds with Jim Yong Kim Promise to factor in global warming "with every investment we make and every action we take." In a Washing Post op-ed he warned that "we need to get serious fast” to avoid the looming “climate catastrophe."

In the wake of this disconnect between word and deed the World Bank has decided to increase its spending on renewable energy in 2016. They are specifically planing to invest in enough renewable energy in developing countries to power 150 million homes.

As outlined by US News, these plans were released in 59-page climate action plan that outlines how these investments will help poorer nations to meet the goals set in the Paris climate accord.

The World Bank's private-sector arm will increase its climate investments from $2.3 billion-a-year to $3.5 billion a year by 2020. The stated goal is to spur a $13 billion a year in private investments.

The bank also plans to help developing countries add 30 gigawatts of electricity to power 150 million homes without emissions of heat-trapping gases.

The World Bank Group said it spends about $10.3 billion a year on climate, which is slated to rise to $16 billion a year by 2020.

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Innovative Solar Energy Financing Instruments

June 11, 2015 Add Comment Edit

Investments in solar energy are booming alongside some innovative financing instruments. As explained by President Obama a bit more than a year ago every four minutes, an American home or business goes solar. There are a host of new financial instruments that serve the green economy and starting in 2013 we began to see some innovative approaches to finance in the solar sector.

This includes creative approaches like master limited partnerships (MLP) and real estate investment trusts (REIT) which offer attractive tax treatment. One of the most interesting financing approaches that is growing by leaps and bounds is an institutionalized version of crowdfunding, called "crowdsourcing".

Securitizations are another interesting approach to financing that involves converting an asset into something that is tradable, like a security. Yieldcos are publicly traded companies created specifically around energy operating assets to produce cash flow and income. In 2013 several companies including NRG, Pattern, Transalta, Hannon Armstrong spun off yieldcos with varying levels of renewable energy assets in their portfolios. In 2014 SunEdison announced plans for a yieldco and in June 2015 First Solar and SunPower launched an initial public offering for their own yieldco.

"This trend is transformative for the solar industry" because of how it can unlock so much more value and generate more returns, explained Patrick Jobin, Clean Technology Equity Research analyst with Credit Suisse.

Both securitization and yieldcos increase access to low-cost financing by pooling solar assets into an investment vehicle. They differ in that yieldcos offer dividends that vary with the company's performance while securitizations offer a fixed-income for a set period. Larger projects are good candidates for yieldcos while securitizations typically involve residential solar assets. In between these two is a different class of securitizations, called "collateralized loan obligations," which are more applicable to the commercial sector where less diversity in assets means more risk.

Going forward the attractiveness of these solar financing instruments will be determined by government policy, new metrics to calculate the value potential and standardization that enable comparisons.

Related
Green Finance Goes Mainstream in 2016
Green Bonds Emerging as a Major Force in Green Finance
The Green Climate Fund Comes of Age
The Climate Investment Fund's Low Carbon Development
IDB to Double Climate Related Projects
World Bank to Finance More Renewables in the Developing World
Drivers of Green Investment Growth
New Sustainability Focused Finance Instruments
Opportunities in Sustainability Finance Highlighting Renewables & Energy Efficiency
The Panama Papers Highlight the Need for Sustainability
A World Bank Action Plan to Combat Climate Change
European Commissioner for Climate Action Urges Development Banks to Divest from Fossil Fuels
A Large and Growing Chorus is Calling for an End to Fossil Fuel Subsidies

New Sustainability Focused Financial Instruments

June 10, 2015 Add Comment Edit

Investors have a wide assortment of new financially responsible instruments. Sustainability investment options run the gamut from simple things like energy conservation projects to complex multi-stakeholder initiatives that target social and environmental improvements. Responsible investing, impact investing, socially responsible investing covers the full range of asset classes in many sectors. This includes instruments that combat climate change, encourage conservation and support social causes. Some examples include green bonds, climate bonds, yield cos, conservation investment and natural resources

One of the most popular investments in 2015 are green bonds. They are specifically designated for the environment and the proceeds are used to fund environment-friendly projects. These tax-exempt assets are issued by federally qualified organizations and/or municipalities for the development of environmentally friendly projects like clean water, renewable energy, energy efficiency, habitat restoration, acquisition of land or mitigation of climate change.

A climate bond is an extension of the green bond concept. Some use the terms green bonds and climate bonds interchangeably while others make the distinction between the two. In the latter case Green bonds raise financing for an environmental project and climate bonds raise finance for investments in emission reduction or climate change adaptation. Climate bonds are fixed-income financial instruments (bonds) linked in some way to climate change solutions.

A yield co is a publicly traded company that is formed to own operating assets that produce a predictable cash flow. They separate volatile activities (e.g. R&D, construction) from stable and less volatile cash flows of operating assets which can lower the cost of capital. Yield cos are expected to pay a major portion of their earnings in dividends, which may be a valuable source of funding for parent companies which own a sizable stake. Yield cos are commonly used in the energy industry, particularly in renewable energy to protect investors against regulatory changes

A green mutual fund or green exchange traded fund is a broad collection of environmentally friendly stocks that are pooled together. This offers a way to diversify asset ownership thereby distributing the risks associated with owning a single stock.

Conservation investments, also referred to as conservation impact investments, are intended to return principal or generate profit while driving a positive impact on natural resources and ecosystems. This can include investments in water like watershed protection, water conservation, stormwater management, and trading in credits related to watershed management.

Natural resources are another asset class that can help support the environment.Conservation investing could also include sustainable food and fiber production, including investments in sustainable agriculture, timber production, aquaculture, and wild-caught fisheries. Finally conservation investing could also include habitat conservation, shoreline protection, emissions reduction from deforestation and degradatio. This can include investments that protect shorelines, reduce emissions from Deforestation and Degradation (REDD+), land easements, and mitigation banking.

Related
Green Finance Goes Mainstream in 2016
Green Bonds Emerging as a Major Force in Green Finance
The Green Climate Fund Comes of Age
The Climate Investment Fund's Low Carbon Development
IDB to Double Climate Related Projects
World Bank to Finance More Renewables in the Developing World
Innovative Solar Financing Instruments
Drivers of Green Investment Growth
Opportunities in Sustainability Finance Highlighting Renewables & Energy Efficiency
The Panama Papers Highlight the Need for Sustainability
A World Bank Action Plan to Combat Climate Change
European Commissioner for Climate Action Urges Development Banks to Divest from Fossil Fuels
A Large and Growing Chorus is Calling for an End to Fossil Fuel Subsidies

Event - Green Bonds 2015 Conference

May 31, 2015 Add Comment Edit

The 5th annual Green Bonds conference will take place on June 22 June 2015, at the Hilton Tower Bridge Hotel, 5 More London Place, Tooley Street, London, UK.

This event is presented by Environmental Finance proud supporters of the green bond market since its inception. The conference has long been the home of movers, shakers and vital discussions in this growing market. Indeed, the seed of the Green Bond Principles was sown at our 2013 conference, when two influential bankers began a conversation about how to add some standardisation to the market.

Book your place for this year's event and influence the green bond market's next steps.

Click here for the agenda, here for the speakers, and here to register.

Related
Green Finance Goes Mainstream in 2016
Green Bonds Emerging as a Major Force in Green Finance
The Green Climate Fund Comes of Age
The Climate Investment Fund's Low Carbon Development
IDB to Double Climate Related Projects
World Bank to Finance More Renewables in the Developing World
Innovative Solar Financing Instruments
Drivers of Green Investment Growth
New Sustainability Focused Finance Instruments
Opportunities in Sustainability Finance Highlighting Renewables & Energy Efficiency
The Panama Papers Highlight the Need for Sustainability
A World Bank Action Plan to Combat Climate Change
European Commissioner for Climate Action Urges Development Banks to Divest from Fossil Fuels
A Large and Growing Chorus is Calling for an End to Fossil Fuel Subsidies

Video - Solar Schools Crowdsourcing Community Initiative

October 11, 2014 Add Comment Edit

The Solar Schools project is putting clean energy in classrooms all over the country. This project gets students and the wider community involved in an effort to support renewable energy and reduce school utility bills. Solar Schools is run by 10:10, a charity that brings people together to help tackle climate change.

For more information on the Solar Schools initiative click here.

Make sure to see the article titled, "Comprehensive Green School Information and Resources." It contains links to over 200 articles covering everything you need to know about sustainable academics, student's eco-initiatives, green school buildings, and college rankings as well as a wide range of related information and resources.

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List of 20 Green Crowdfunding Platforms and Resources

Amplifyd: A Unique Crowdsourced Lobbying Platform

June 20, 2014 Add Comment Edit

The Amplifyd crowdsourced lobbying platform was launched on June 10th. It supports several campaigns including those focused on environmental themes. Amplifyd is a social activism startup based in Berkeley, California that allows people to influence public policy. Their platform is the world's first technology-driven lobbying solution.

Amplfyd works by giving supporters the opportunity to purchase lobbying calls to elected officials while financially supporting the nonprofit at the same time. People can also generate income by becoming a caller.

While corporations spend more than $3 billion a year to influence politicians once they are elected, people have no voice. Amplifyd claims that signing online petitions is not an effective tool to influence your elected officials because these petitions are not restricted to those that matter to politicians (ie their voting constituency). Amplifyd solves this problem by verifying your identity through your billing address, so your representative knows that you are in fact a voting constituent.

As a crowdsourced social activism platform, people can purchase calls from campaigns listed on the site. Campaign organizers can add their own contact for their campaigns or simply choose from federal and state databases.

For every call made, the organization managing the campaign will make a base rate of $1.00. This means they could generate passive income for simply creating and managing the campaign. If the call was made by the campaigner or someone from their team, they will make an additional $2.00, resulting in a total earning potential of $3 dollars per call for the campaigner. Independent callers will earn from $1 per call with the chance to double their rate by inviting people to join the platform - 10 cents increase per person invited.

For more information click here.

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New Social Activism Crowdsourcing Platform

April 22, 2014 1 Comment Edit

Social activism can change the world and a new concept is being launched shortly that will help give people more power and influence over their governments. This new social activism is called Amplifyd, it is a crowdsourced lobbying platform where people can support causes in their community and in return get a personal representative that will call and lobby their elected officials on their behalf.

Each campaign is managed by non-profits fighting for important causes, giving these organizations an additional way to mobilize their communities and generate active and passive incomes.

Anyone can sign up to become a crowdsourced caller, getting paid to lobby elected officials for others.* According to Scott Blankenship the founder & CEO of Amplifyd, this is especially great for college students, post-grads, activists, hourly or part-time employees needing an additional source of income and avid travelers, since people can make calls through our platform from anywhere.

Blankenship believes that Amplifyd will change the political status quo in the US. Stay tuned to The Green Market Oracle for more information and the formal launch details.

Click here to signup at the Amplifyd website.

*The Green Market Oracle has not vetted the legitimacy of the site nor the service it purports to offer.

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Event - Green Port South Asia

February 02, 2014 Add Comment Edit

The 2nd GreenPort South Asia Conference will take place on February 26 and 27, 2014 at the The President Hotel in Mumbai, India. The conference will again focus on the sustainable development of ports and terminals but will also look at the need for the infrastructure to keep pace with the development of ports together with investment and finance options and initiatives. This conference will include environmental policy framework and legislation; infrastructure: green initiatives for development and construction; investment for port development: financing green projects as well as the practical issues of pollution control; improving efficiency and increasing profitability in ports and terminal.

India’s economy has the potential to be the fastest growing of the BRIC countries over the next half century. It is predicted that the Indian economy will overtake Italy in 2015, France in 2020, Germany in 2023 and Japan by 2032, in terms of gross size.

With the vast majority of India’s international trade moving by sea (90 percent by volume and 70 percent by value), development of the country’s ports will be critical. The global average of containerisation is 60-70 percent; India’s rate is currently only around 25 percent, therefore highlighting that the demand for new container ports and inland transport infrastructure is forecast to be particularly strong.

To register click here.

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Discussion - The Other Debt Ceiling: Using Finance to Balance Our Environmental Budget

November 11, 2013 Add Comment Edit

This discussion will take place on November 20, 2013, and is presented by Solar One and NYC ACRE 7 p.m. -9 p.m. (Doors at 6:30), The WNYC Jerome L. Greene Performance Space 44 Charlton Street, New York City.

As weather events become more extreme, water shortages threaten, and human sprawl leads to biodiversity loss, there is a new focus on the global economic impact of environmental degradation. Studies from the National Oceanic and Atmospheric Administration, the Harvard School of Public Health, and others assert that our active growth and inactive conservation efforts have left us with a trillion-dollar bill.
So how do we pay down this debt? In recent years, innovators in policy and finance have started to answer that question by creatively using the tools of debt, capital, and ownership to clean up our lands, preserve our national treasures, and accelerate clean energy adoption.

For this event, we look at both sides of environmental debt. We will discuss the policies and ideologies that led us to this level of environmental debt, and then debate what financial and regulatory solutions exist to enrich both the environment and the economy.

The discussion is a featured event of Solar One and NYC ACRE’s cleantech panel discussion series, Clean Energy Connections.

Event Coordinator is Sara Jayanthi (Sara@solar1.org) Contact number is 212 505 6050.

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Sustainable Development Goals to Follow Millennium Development Goals

October 14, 2013 Add Comment Edit

Under the auspices of the UN, a new global sustainability initiative is taking shape. With the UN Commission on Sustainable Development (CSD) having wrapped up its work on September 20th and the Millennium Development Goals (MDGs) set to expire in 2015, political leaders and policy makers are crafting a new development framework based on sustainability.

Millennium Development Goals

In 2000, world leaders set out the MDGs to help eliminate poverty worldwide. MDGs were inaugurated as the “world’s greatest promise” in the pursuit of concrete, measurable improvements on global poverty, hunger, health, education and other key social issues. In June, 2013 the UN secretary-general, Ban Ki-moon, called the goals “the most successful global anti-poverty push in history.”

In total, there are eight MDGs, 21 specific targets and more than 60 indicators. We have seen progress on seven of eight MDGs including poverty, hunger, education, child mortality, HIV, water and sanitation. But we have not seen the progress we would like to see on gender equality, particularly as it relates to schooling. One of the outstanding accomplishments of the MDGs involve cutting the number of people who live in extreme poverty by half.

The MDGs have augured unprecedented efforts and significant progress in an effort to address the needs of the world’s poorest people. Overall they have been remarkably successful, however, despite considerable progress, some of the goals are unlikely to be realized by 2015. In addition to assessing the MDGs, leaders and policy makers are now thinking about what comes next.

Sustainable Development Goals

A September 2013 special report from a consortium of organizations led by CIGI and the Korea Development Institute (KDI) reviews a number of options for the post 2015 successors to the MDGs. The report concludes the global community must build on the current MDGs and move beyond meeting basic human needs. In addition to emphasizing the role of adolescent girls, the report supports the creation of inclusive sustainable development goals.

Rio+20 Conference

In June 2012, countries at the Conference on Sustainable Development known as the Rio+20 agreed that levels of environmental protection are insufficient. They put forth the basic outline of SDGs and member states agreed to establish an “inclusive and transparent intergovernmental process open to all stakeholders, with a view to developing global sustainable development goals”.
They agreed to build upon the MDGs and converge with the post 2015 development agenda that included a process to develop a set of SDGs. A number of work streams were commenced to elaborate on the proposed SDGs.

In the Rio+20 outcome document, member states agreed that sustainable development goals (SDGs) must:

Be based on Agenda 21 and the Johannesburg Plan of Implementation
Fully respect all the Rio Principles
Be consistent with international law
Build upon commitments already made
Contribute to the full implementation of the outcomes of all major summits in the economic, social and environmental fields
Focus on priority areas for the achievement of sustainable development, being guided by the outcome document
Address and incorporate in a balanced way all three dimensions of sustainable development and their interlinkages
Be coherent with and integrated into the United Nations development agenda beyond 2015
Not divert focus or effort from the achievement of the Millennium Development Goals
Include active involvement of all relevant stakeholders, as appropriate, in the process

It was agreed that SDGs must be:

Action-oriented
Concise
Easy to communicate
Limited in number
Aspirational
Global in nature
Universally applicable to all countries while taking into account different national realities, capacities and levels of development and respecting national policies and priorities.

The outcome document further specified that the development of SDGs should:

Be useful for pursuing focused and coherent action on sustainable development
Contribute to the achievement of sustainable development
Serve as a driver for implementation and mainstreaming of sustainable development in the UN system as a whole
Address and be focused on priority areas for the achievement of sustainable development

The outcome document also mandated the creation of an inter-governmental Open Working Group, that will submit a report to the 68th session of the General Assembly containing a proposal for sustainable development goals for consideration and appropriate action.
SDG Open Working Group had its first session in March 2013, and will run through a total of eight sessions concluding in February 2014.

To ensure the prioritization of sustainable development at the highest levels of government, members at Rio+20 also agreed to change from the CSD, which was formed after the 1992 Earth Summit in Rio de Janeiro, to the High-level Political Forum (HLPF) on sustainable development.

High-level Political Forum on Sustainable Development

The first HLPF meeting on SDGs has already taken place at the 68th session of the General Assembly. On September 24, 2013, the HLPF on Sustainable Development reiterated the agreements articulated at Rio+20 and included the following items:

Provide political leadership, guidance and recommendations for sustainable development
Follow-up and review progress in the implementation of sustainable development commitments
Enhance the integration of the three dimensions of sustainable development
Focused, dynamic and action-oriented agenda
Ensuring the appropriate consideration of new and emerging sustainable development challenges.

At the inaugural ceremony for the HLPF, UN Secretary-General Ban Ki-moon said, “Your forum is a key platform for examining today’s challenges in a holistic and integrated manner. This forum can be the catalyst for a strengthened global partnership for sustainable development, providing political leadership grounded in solid science.”

To advance the work of the HLPF, the UN General Secretary said he will create a Scientific Advisory Board.

General Assembly President John William Ashe said, “We have created this HLPF for the express purpose of delivering more effectively on our aspirations and agendas at a time when we realize that the practice of sustainability provides the only real bridge from our past to our present and our future, and from our planet to our peoples and our prosperity.”

The HLPF will bring together government leaders every four years as part of the General Assembly to address the challenges of sustainable development. It will also meet annually at the ministerial level, as part of the UN Economic and Social Council (ECOSOC).

In 2016, the HLPF will review implementation of sustainable development by all countries and the UN system, in order to bring about accountability and a focus on action.

“People have a right to expect real results from the new Forum, ” said Wu Hongbo, UN under-secretary-general for economic and social affairs. “There are real challenges that must be faced. People need jobs, health care and education,” he said. “And they also need food security, clean air and clean water. They need development that is sustainable, and the Forum has to deliver progress in all of these areas.”

On the morning of September, 25, 2013, the UN General Assembly officially approved the inclusion of SDGs, including environmental sustainability, to replace MDGs. This measure passed thanks in part to a new coalition between poorer countries and the U.S., Europe, Japan and other nations.

“We are resolved that the post-2015 development agenda should reinforce the international community’s commitment to poverty eradication and sustainable development. We underscore the central imperative of poverty eradication and are committed to freeing humanity from poverty and hunger as a matter of urgency. Recognising the intrinsic interlinkage between poverty eradication and promotion of sustainable development, we underline the need for a coherent approach which integrates in a balanced manner the three dimensions of sustainable development. This coherent approach involves working towards a single framework and set of Goals –universal in nature and applicable to all countries, while taking account of differing national circumstances and respecting national policies and priorities. It should also promote peace and security, democratic governance, the rule of law, gender equality and human rights for all.”

A World Bank Action Plan to Combat Climate Change

September 10, 2013 Add Comment Edit

The World Bank has been an advocate of environmental action for many years now. Recently the Bank's president Jim Yong Kim called for a plan to address climate change. Rachel Kyte, vice-president for sustainable development, explained that fighting climate change has become a guiding principle for the bank.

The World Bank has introduced a wide array of projects to mitigate and adapt to climate change: from promoting partnerships for climate action in urban areas across the globe to funding clean technology in developing countries.

With historic commitments of more than $12 billion, India has been the main beneficiary of World Bank funding for climate-related projects. The vast majority of projects are directed at renewable energy, while a much smaller number concern forestry, water, sanitation and flood protection.

Underscoring the Bank's efforts to assist developing countries, Ms Kyte said that “climate change is absolutely central to our understanding of how we can help...countries grow and prosper.”

© 2013, Richard Matthews. All rights reserved.

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