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greenhouse gas) savings from investing in Free money first?
energy-efficiency measures, eg, smart When it comes to certain sectors and
lighting, low-e windows that have a projects, there may be low- or no-cost
reflective metallic layer to help heat and sources of finance. Many governments or
cool buildings, solar panels, and heat agencies have set specific sustainability
pumps. But higher energy costs also goals or targets, such as the European
reduce cash available to invest in these Green Deal, that depend on businesses,
projects, a situation made worse by low public service organisations, and
predicted growth rates and a likely individuals changing their behaviour. To
recession in some economies. incentivise these changes, governments or
Banks, investors, and other agencies provide grants, subsidies, or
conventional finance providers also face targeted blended finance packages at low
competing demands for their funds, and or preferential rates. For example, the UK
as a result value-creating sustainable government announced:
projects remain on the shelf, despite their y The Public Sector Decarbonisation
positive impact on businesses, customers, Scheme to fund both energy efficiency
nature, and the climate. and low-carbon heat upgrades;
Becoming sustainable requires cash y The Green Recovery Challenge Fund,
now in order to reap the rewards in the which is a £40 million fund for
future. The World Economic Forum conservation organisations and their
estimates that there is a persistent annual suppliers;
gap in global sustainable development y A direct air capture programme for
financial investment requirements of $2.5 developing new technology that
trillion — which could increase to $4.2 captures CO 2 from the air; and
trillion if the effects of the pandemic are y The Automotive Transformation
taken into account, according to the Fund, which supports capital and
Organisation for Economic Co-operation research and development projects in
and Development. the UK automotive industry.
The good news is that many markets, While many of these schemes only
institutions, businesses, and individuals apply to particular sectors or technologies,
are willing and able to finance this if your business qualifies for them, they
transition with funds earmarked for this can be transformative and well worth
very purpose. There are many ways to investing a couple of hours in research.
finance sustainability projects that often The UN has several useful initiatives to
have a lower cost of capital, with lower risk help businesses access sustainable
structures, and different repayment terms development finance. For example, the UN
that match the expected positive impact of Special Envoy on Innovative Finance and
these projects. Sustainable Investments described the UN
nvesting in sustainability These sustainable financing Joint Sustainable Development Goal (SDG)
projects, such as net-zero energy innovations range from grants or Fund as offering “a sustainable investment
systems, reducing waste and interest-free loans to sustainability model by leveraging the power of markets
resource use, and redesigning bonds, impact investment schemes, and to accelerate businesses, empower
Iproducts and services often crowdfunding. Many of these innovations communities, and provide a clear path to
creates value in the medium to long involve blended finance packages, which self-sufficiency”.
term. Making businesses more combine public and private sources of The UN has a number of initiatives that
sustainable is a good long-term finance as well as combining equity and highlight schemes in different countries
business strategy, but like all loans. This article explores the potential designed to finance their national
investment decisions, it has to strengths and weaknesses of these priorities, which include preferential
demonstrate future benefits to justify emerging financial products and services access to finance and capital markets.
the need for short-term expenditure. to help finance professionals match their A useful guide to what constitutes a
Recent energy price increases illustrate sustainable financing needs with sustainability project can be accessed via
this sustainable investment challenge. different financial packages (see the the EU taxonomy for sustainable economic
Higher forecasted energy prices create the sidebar, “9 Tips for Financing Sustainable activities. Different countries have their
possibility of substantial future cost (and Transformations”). own version of this taxonomy, and they

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