Responsible Investor

of funds and their sizes suggests there is investment capacity. A report in September 2007 by Canadian investor services firm Criterion Investments claimed the clean energy investment universe already had a market cap of $1.4 trillion with expected capital flows of $70bn a year. This gives some perspective to the €10bn on the table from US institutions.
Valuations, of course, need to be scrutinised carefully; when don’t they? But the underlying political signs are positive. The EU Directive proposal issued in January targets 20% of Europe’s energy being producing from renewable sources by 2020 and includes measures to remove barriers to growth for renewables, including simplifying authorisation procedures for new projects as well as funding for research and development of next generation renewable energy sources.
The investor action plan aims to lobby hard for the same kind of commitment from the US government, which will

be crucial.
Interestingly, a less headline-grabbing part of the action plan could turn out to be more important than the $10bn clean tech commitment. The coalition said it would prioritise green building standards at the core of future investment decisions, lending support to pressure on new-build properties to be energy efficient. Significantly, it also backed a 20% reduction in energy use in existing property investment holdings over the coming three years. For a giant real estate investor like CalPERS, which has more than $20bn in property, this will involve a lot of ‘retrofit’ to make existing properties energy efficient. The underlying assertion is that more efficient buildings make for better, environmentally sound profits. With buildings counting amongst the world’s biggest energy users, and hence carbon emitters, the coalition’s goal is very good news indeed.

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