The Momentum Behind Responsible Investing in North & South America
Financing Decarbonisation and Infrastructure Improvements
Decarbonisation and infrastructure improvements are crucial for the future of the planet. Responsible investing is a key driver of this change, and the momentum behind responsible investing in North and South America is growing. By investing in renewable energy and infrastructure, investors can help to reduce greenhouse gas emissions and support economic growth and development. Governments can also play a role in financing these initiatives, and by working together, we can build a more sustainable future for all.
The need to decarbonize the economy and improve infrastructure is now more pressing than ever. Climate change is almost universally recognised as a global issue that requires immediate action, with responsible investing acting as a catalyst in driving this key change. In North and South America, the momentum behind responsible investing is growing, but variable. Investors may increasingly be looking for opportunities to finance decarbonisation and infrastructure improvements but Legislators are often focussed on Election cycles rather than long term outcomes for the planet..
The Need for Decarbonisation and Infrastructure Improvements
The Intergovernmental Panel on Climate Change (IPCC) has warned that the world must limit global warming to 1.5°C to avoid the worst impacts of climate change but the rate of warming since 1981 is more than twice as fast: 0.32° F (0.18° C) per decade. It’s long been accepted that achieving this target will require a rapid reduction in greenhouse gas emissions, which in turn will require a significant shift towards renewable energy sources and investment.
At the same time, infrastructure in many parts of the world is in urgent need of improvement. This is particularly true in developing countries, where infrastructure deficits can hinder economic growth and development. Improving infrastructure can also help to reduce greenhouse gas emissions by making it easier to transport goods and people using low-carbon modes of transport.
The Rise of Responsible Investing across the Americas
In North and South America, responsible investing is gaining momentum. According to a report by the Global Sustainable Investment Alliance, responsible investing assets in the United States grew by 42% between 2018 and 2020, reaching $17.1 trillion. In Canada, responsible investing assets grew by 48% over the same period, reaching $3.2 trillion. In Latin America, responsible investing is also growing, with a number of initiatives underway to promote sustainable finance.
Financing Decarbonisation and Infrastructure Improvements
Responsible investing can play a key role in financing decarbonisation and infrastructure improvements. Investors can support renewable energy projects, such as wind and solar power, as well as energy efficiency improvements in buildings and transportation. They must also invest in companies that are developing innovative solutions to reduce greenhouse gas emissions and improve infrastructure even if that requires a long term view of returns.
Governments must also play a role in financing decarbonisation and infrastructure improvements. They must provide incentives for renewable energy projects, such as tax credits and subsidies. But in all areas of investing, whether Public or Private, there must be consistency & transparency in metrics to measure and monitor effectiveness of those investments.
