Paper

Investing in the Sustainable Economy

Mobilizing investments and private savings to achieve sustainability goals
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This report provides examples of how institutional investors are actively allocating capital in projects that contribute to the Green Economy and other Rio+20 themes, such as renewable energy, microfinance, and sustainable forestry. They are doing so by investing in social and environmental sectors in both developed and developing economies. The report presents case studies that highlight the importance of mobilizing private savings towards sustainability goals. It demonstrates that:

  • Attractive opportunities already exist for asset owners who want to match long term risk/return needs while contributing to solutions for sustainability challenges;
  • Allocations are often small in comparison to investors’ entire assets under management;
  • Investors are constrained by issues such as deal size, lack of historical performance data, and lack of knowledge about these investment areas;
  • Investors have found that the risks associated with these investments may not be as high as initially perceived and that these investments can generate healthy financial returns;
  • Collaborative investments and public-private partnerships are helping investors overcome some challenges;
  • Government policies which help to mitigate investment risk are important to making allocations.