Institutional investors such as pension funds and insurance companies could provide up to half the finance needed to develop renewable energy projects through to 2035 if policy barriers can be opvercome and short-term investment practices reformed.
That is according to a new report by the Climate Policy Initiative (CPI), which argues that the long-term, reliable returns offered by green energy should align with institutional investors’ objectives, rather than those seeking short term gains.
Globally, institutional investors manage a combined $71tr in assets, giving them control over one of the largest pools of private capital in the world. The CPI says that by making green energy investments, institutions could enhance the performance of their portfolios and lower the cost of capital for renewable energy while removing some of the financial burden of supporting clean energy infrastructure from cash-strapped governments.
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