Sovereign wealth funds: the catalyst for climate finance?
June 5, 2017 Editor 0
Following the Paris deal on international climate change, governments are beginning to explore new financing mechanisms for investing in the growing low carbon economy. Over the next decade sovereign wealth funds (SWFs) could become an important game changer in green investing. Recognizing the untapped potential of SWFs, two key questions emerge: how can SWFs increase their exposure to green asset classes? And what are the constraints?
Investors and financial institutions are becoming increasingly aware of the risks associated with fossil fuel projects and are showing growing interest in green bonds and other financing tools that facilitate investment in low-carbon energy solutions.
Being patient investors, with longer term investment horizons than many others in the financial services sector, SWFs could become catalysts for implementing the December 2015 Paris Climate Agreement. In the November 2016 annual meeting of the International Forum of Sovereign Wealth Funds in Auckland, participants highlighted that SWFs are particularly well-positioned to become trailblazers in green investment. The majority of members are oil-based SWFs which are looking to economic diversification of their finite carbon wealth into industries and sectors that would yield broader societal, economic and financial benefits.
- It’s Heating Up: Industry Needs Climate-Friendly Policies to Keep Cool and Competitive
- Powering up Africa through innovation
- Partnering to Make Investment Climate Reforms Happen for Development
- Forging the link between inclusion and integrity in Ethiopia
- The Gender Gap in Access to Finance
- Bridging new and old energy
Categories: World Bank PSD
Tags: Sovereign wealth funds
Subscribe to our stories
- Digital transformation in the banking sector: surveys exploration and analytics August 3, 2020
- Why Let Others Disrupt You? Take the Smart Self-Disruption Journey! August 3, 2020
- 5 Tips for Crowdfunding During the Pandemic August 3, 2020
- innovation + africa; +639 new citations August 3, 2020
- SME Innovation: 10 Priorities for Support Post-COVID-19 July 7, 2020