As global efforts to achieve a sustainable economy intensify, the financial system faces unprecedented challenges in scaling investments. Deloitte estimates the energy transition could cost up to $200 trillion by 2050, underscoring the need for a transformative approach to deploying capital.
Chris Ruggeri, Deloitte Transactions and Business Analytics LLP principal and Sustainability, Climate & Equity leader, noted:
“While there is an abundance of capital to help drive the green economy, it doesn’t always reach the right places at the right times, highlighting a significant challenge in the current financial landscape.”
Ruggeri moderated a panel discussion featuring:
- Dan Barker, CEO of Halcyon, an accelerator for impact-driven startups
- Anna-Marie Slot, co-founder of Transition Value Partners
- Mike Wise, VP of S2G Ventures
- Freedom-Kai Phillips, director of Deloitte Center for Sustainable Progress
The panel explored innovative strategies to evolve the financial ecosystem to support a green economy.
Key Insights from the Panel
What does financing the green economy entail?
- Barker: Financing involves three components—stopping environmental damage, achieving net-zero emissions, and regenerating the planet.
- Phillips: Effective capital deployment can reduce costs by up to 25%. Focus areas include vulnerable regions, concessionary capital, and engaging catalytic and public investors to reduce overall costs.
- Slot: Boards and investors need to understand climate risks and opportunities. Engaging forward-thinking stakeholders is key to promoting finance flows.
- Wise: Innovations that are efficient, profitable, and environmentally beneficial will drive scaled investment.
How can capital be deployed strategically?
- Phillips: Strengthen international frameworks and multilateral bank partnerships. Build project pipelines in emerging markets to attract investments.
- Slot: Clear government policies and regulations are essential. Rapid action ensures cost-effectiveness and energy security.
- Wise: Engage asset owners such as sovereign wealth funds and insurers. Tailor strategies to address staffing, governance, and incentives barriers.
- Barker: Venture capital models should evolve to prioritize patient investments in capital-intensive sectors, signaling confidence to private investors.
Confidence in Sustainability Investments
The panel expressed optimism about the business case for sustainability:
- Phillips: Sustainability investments can transform economies, improving education, water access, and renewable energy adoption globally.
- Slot: Companies prepared for adaptation will thrive, while those who delay risk being left behind.
- Wise: A specialized, efficient financial system fosters trust and accelerates growth.
- Barker: Innovative founders with localized solutions offer hope and are worth investing in.
Deloitte’s panel highlighted that achieving the energy transition requires systemic change, collaboration, and innovative financing approaches. By aligning strategies, stakeholders can drive sustainable economic transformation at the scale required.
