Investments towards Renewable Energy
The crucial open question is how quickly clean energy investment scales up in emerging and developing economies, where supportive strategies and policies will need to be accompanied by improved access to finance.
Institutional investors, i.e. pension funds, insurance companies, sovereign wealth funds, endowments, foundations and asset managers, can play an important role in scaling up renewable energy investment.
Renewable energy presents investors with a unique opportunity to diversify their holdings, benefit from stable, long-term and strong cash flows that match their liabilities, fulfill their fiduciary duties, and minimize risks from stranded assets and adverse regulatory changes.
Institutional investors have so far not taken advantage of opportunities presented by renewables, as less than a fifth of such investors have made any renewable energy investments, while only about 1.5% have invested directly in renewable energy projects.