Private Sector Finance
Advancing sustainable investment and banking practices in the mainstream financial marketplace through tailored data, research and peer-to-peer learning.
Institutional investors, banks and other private sector financial institutions oversee trillions of dollars of investible capital. How they choose to deploy these resources will have a large impact on which companies, technologies and projects succeed and flourish. It is crucial that these financial actors allocate their capital in a way that accounts for environmental and social risks and supports sustainable solutions.
WRI envisions a future where financial markets support a sustainable world for generations to come. In this future, all investors will consider sustainability as part of fundamental decision-making, markets will incorporate company sustainability performance into valuation and sustainable investing will be mainstream.
In the face of increasing resource scarcity and other global sustainability challenges, the profitability of businesses over the long-term is directly impacted by material sustainability risks and opportunities.
While there is growing interest to employ financial strategies that account for these factors — such as through favoring companies poised to thrive in a resource-constrained world — there are significant barriers to doing so. Not only are there no tested road maps for investors to follow, but key market participants have been slow to develop mainstream products and recommend them to clients. As a result, sustainable investment products with high quality returns are lacking, as are the data for evaluating sustainability risk and opportunity — particularly for certain sectors, regions and asset classes.
Leading businesses are already shifting management practices to prepare for this future. These companies are intentionally managing their sustainability performance to ensure that they will survive — and thrive — in the new economics of a resource constrained world. Long-term investors, banks, regulators and other key players can foster this new private-sector orientation toward sustainability, incentivizing sustainability performance while securing their own long term financial stability and security.
Learn more with WRI's Green Targets Tool
WRI’s Finance Center works to facilitate the transition toward sustainable private sector investment by focusing on:
• Sustainable investing
• Sustainable banking
• Innovative financial instruments
In addition to typical desk research, WRI invests its own capital in a prudent manner that incorporates how companies manage ESG risks and opportunities, while achieving a market return. This approach will help maintain and increase WRI financial resources to provide continuous support to carry out the Institute's mission.
Photo Credit: Erol Ahmed/Unsplash.