THE BACKGROUND
By considering environmental, social, and governance (ESG) considerations when making investment decisions, sustainable finance is crucial in facilitating more long-term investments in sustainable economic activities and projects. The potential of sustainable finance is evident when looking at investment needs. On the one hand, the financing gap to achieve the SDGs is estimated to be over EUR 2.25 trillion per year globally and around EUR 350 billion of additional investments per year over this decade are needed to achieve the EU’s 2030 emissions target in energy systems alone.
On the other hand, according to a recent report by the Organisation for Economic and Co-operation and Development (OECD), shifting 1.1% of the total financial assets held by banks, institutional investors, or asset managers (approximately EUR 3.7 trillion) towards sustainable investments would be enough to fill the growing financing gap for sustainable development.
THE PROJECT
In partnership with the Frankfurt School of Finance and Management, FINANCE FOR IMPACT has been retained as an advisor on using sustainable finance in capital markets. A team of consultants advised on solutions for scaling private capital towards sustainable investments in low- and middle-income countries.
THE RESULTS
The specific objectives of this new assignment were twofold: i) comprehensive overview/mapping and qualitative and quantitative analyses of the state of development (current and planned) of sustainable finance, covering regulatory and non-regulatory frameworks and sustainability-related financial instruments; and ii) ad-hoc advisory support on specific topics, e.g. greening of stock exchange markets, use of sustainable-linked bonds, strengthening of credit ratings, currency hedging, and use of sustainable finance for improving the resilience of the agriculture sector.
Location: Worldwide
Solution: Investment Strategy
Tool(s) mobilized: Strategic advising, market assessment, data mining and modelling
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