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Blended finance and investment frameworks - our conversation with Greenbank

On 7 September, the Climate Parliament spoke to Greenbank about scaling investment in green grids. We talked with Nicola Day, Deputy Head of Greenbank and Investment Director, and Joe Crehan, Investment Manager, about the importance of bringing together all relevant stakeholders to accelerate the transition to renewable energy.

Greenbank was established in 2004 as the ethical investment arm of Rathbones Group. By 2021, it had reached £2 billion of assets under management, and is still experiencing substantial growth due to increasing investor interest in sustainability. Greenbank manages portfolios on behalf of pension funds, charities, and private investors. There are eight sustainable development themes that guide how Greenbank invests and engages. These themes align with the United Nations Sustainable Development Goals (SDGs). Greenbank’s in-house ethical, sustainable and impact research team also maintains a proprietary database covering over 1,000 global companies. It helps them assess not only what these companies do, but also how they operate.

After a presentation of Climate Parliament’s Green Grids Investment Dialogue, Nicola Day drew connections between this initiative and the themes discussed at COP27, particularly the need to develop mechanisms to reduce risk in order to mobilise and accelerate financing for the green transition. She acknowledged that the finance sector is complex, with numerous players and stakeholders, and highlighted the importance of what Climate Parliament is intending to do which is bringing them all together to work more efficiently towards common goals. Nicola stressed the importance, from the point of view of investors, of developing blended finance: combining public and private financing is an essential step to reduce risk and attract private capital, as outlined in the draft ‘Clean Energy. Delivered’ investors statement, to be published after the Dialogue during COP28 in Dubai.

Joe Crehan concurred with Climate Parliament on the pressing need to address the absence of an efficient investment framework. He explained that there can be a sense of frustration from the investor's perspective, when policymakers make decisions that create impediments rather than facilitate the flow of capital into green projects. So, there is a strong interest within the investors community to engage in more dialogues and discussions with the stakeholders who have the ability and power to implement a better framework, like Members of Parliament. Joe also agreed that investment in grids is far below the required necessity, and it needs to be scaled up to achieve the energy transition at the necessary pace. He referred to an article published recently by Michael Liebreich, Senior Contributor at BloombergNEF on the “Five Horsemen of the Green Transition”. It identifies five obstacles which must be addressed to achieve the transition to net zero, including “a dramatic expansion of our electrical infrastructure”, reminding us that “without transmission, there is no transition”. While these challenges are substantial, the author suggests that they can be overcome with the right leadership, innovation, and resources.

Climate Parliament is committed to bring together all the right stakeholders to make this happen.


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