Editor's note: For GreenBiz coverage on sustainability outcomes from the 2013 World Economic Forum, click here.
More than most of the major actors in the climate change crisis, sustainable investors have sought to call corporations to account for unsustainable business practices and advocate for effective legislative and regulatory measures. Because of these efforts, assets allocated to sustainable investment strategies have continued to increase throughout the past decade.
Meanwhile, as a new report from the World Economic Forum points out, "Greenhouse gas (GHG) levels are rising amid growing concerns that the world is moving beyond the point at which global warming can be contained within safe limits."
The report — entitled the Green Investment Report - The ways and means to unlock private finance for green growth — warns, "Investment-grade public policy is an important prerequisite to engage the private sector." It has been estimated that private investment will have to account for as much as 85 percent of the transition to a low-carbon economy. "Public financial institutions need to more actively engage private investors," the report states.
The report does record some developing success stories, albeit on a small scale, in the public financing of such a transition. Developing nations, many of which are expected to be the hardest hit by climate change, have been scaling up their green investments at a rate that significantly exceeds that of the member nations of the Organization for Economic Co-operation and Development.
"Clean-energy asset financing originating from developing countries in 2012 is on track for the first time to exceed those originating from developed countries," the report states, noting that most of the financing has been encouraged by government policies.
Next page: The need to take a new approach