The rapid growth of impact-oriented (“ESG”) investments in the energy sector prompts this article’s discussion of 1. Where that capital is going, 2. Where it should go, and 3. Why it isn’t going there. Market observers and participants see the current yield compression and “dry powder” ratios in the renewable energy infrastructure sector and wrongly declare this an indication of capital sufficiency – it is a sign of too few projects, not too much capital. The biggest impact therefore comes from addressing the supply of construction ready projects, which is accomplished by i) injecting capital into the project development phase, or ii) offering more flexible long-term capital which changes the definition of what is “financeable”. Both approaches are hard and unglamorous. Meanwhile, “cleantech” investments – while necessary at some level – play the role of “shiny object”, drawing attention and capital toward SPACs and venture capital funds which, though well-intentioned, rob the infrastructure sector of the opportunity to displace fossil generation at the required pace.
Yuri Horwitz, CEO of Sol Systems, joins us to discuss the convergence of social and environmental impact principles on solar energy infrastructure. We talk about what motivates corporations to take action, the challenges of implementation, how corporations are integrating ESG into their solar procurement strategies, Sol Systems’ recent groundbreaking solar power community investment agreement with Microsoft and more.
This week on the Experts Only podcast, we’re thrilled to welcome the passionate Colin le Duc, Partner, Generation Investment Management. In this episode, host Jon Powers discusses sustainability, sustainable investing, and Generation Investment Management with le Duc. Hear from someone who’s been on the frontlines of ESG investing as he and Powers discuss the end of incrementalism and the exciting future of sustainable investing.