The Climate Finance Relay Race

A future 10 billion person planet and the corresponding thermodynamic demand for resources is outpacing supply; 1.7 planet Earths are required to sustain the current rate of human consumption.

Increasingly complex geopolitics is creating significant commodity price volatility and uncertainty about future food and energy security. This unsustainable trajectory highlights the urgent need for innovative solutions that can improve resource efficiency and shift us toward more sustainable production systems.

S2G believes investment in this “climate megatrend” offers an unprecedented opportunity to drive resource productivity, reduce volatility and generate sustainable economic growth in a world of climate adaption. However, climate investing is relatively new, siloed and underrepresented. The lack of “fit for purpose” capital markets to finance new sources of resource productivity or reduce climate volatility is becoming increasingly topical. 

We conducted a survey of over 50 asset owners to to gather context and feedback on opportunities and frictions to climate-related underwriting.  Asset owners hold tremendous market influence and the potential to increase climate investment by orders of magnitude, even with small, marginal changes to their approach. However, S2G finds that the development of the enabling ecosystem is critical to navigating market and asset-owner-specific frictions to climate investment. 

Our report examines how asset owners are approaching climate investing, the reasoning behind their strategies, and potential pathways to increase capital flows.

Listen to our related episode of the S2G Podcast: Why We Need a Climate Finance Relay Race.