Where ROI meets ROE (Return on Environment)
Sustainable investing has grown over the past decade, ushering in a new era of protecting the environment while earning financial returns. However, the cost of addressing the world’s urgent environmental challenges exceeds the capacity of philanthropic and public sector resources – this leaves a major financing gap. New research shows that blended financing can bridge that gap by directing private investment dollars to projects that deliver environmental outcomes and competitive financial returns.
Environmental Defense Fund’s (EDF) Sustainable Finance program works with the financial sector, with investors, and via public-private partnerships to find and scale innovative financing solutions that foster economic and environmental prosperity.
EDF Sustainable finance strategy
We seek to leverage the influence, expertise and capital of the financial marketplace to protect the environment, improve livelihoods and achieve ambitious environmental goals. We’ll do this by working with others to implement the following strategies:
|1. Getting the rules right||2. Making engagement & investment easier||3. Demonstrating returns|
|We are working to advance policies and practices that improve transparency, reduce risks and create clear incentives and price signals in order to design more efficient and effective markets for environmental investment opportunities.||To spur new investment in environmental solutions, we must lower investment barriers and transaction costs. We are creating and promoting tools and resources that improve information flows, standardize complex projects and build capacity in the marketplace.||Environmental investments remain below the radar for many investors. We aim to connect private capital with priority environmental opportunities by working with partners on “lighthouse” or pilot transactions that demonstrate a strong investment case, mitigate risks and deliver returns. In the process, we are creating new investment models that others can follow and take to scale.|
EDF is a proven leader in working with the financial sector to drive innovation and progress. Over the past several years, EDF initiatives have:
- Raised the bar for environmental management across the private equity (PE) industry through pioneering partnerships with KKR, Carlyle, and Oak Hill Capital to measure, manage, and improve environmental and financial performance across PE portfolios.
- Delivered healthier air to millions of New York City residents by empowering building owners and operators to invest in nearly 6,000 heating oil conversions through NYC Clean Heat, reducing emissions of fine particulate matter from buildings by over 65%.
- Accelerated the transition to sustainable fisheries management by providing loans totaling over $4.2 million to support California Fisheries Fund
EDF’s Sustainable Finance experts also help to scale impactful financing through research, insight and case studies. EDF’s latest report, Unlocking Private Capital to Fund Sustainable Infrastructure, presents a framework for state and local governments, philanthropists and financial institutions to advance new partnerships for impact.
For regular updates please follow the EDF+Business blog.