Billions of dollars are invested each day to grow the world economy.
Most of this money buys things that are made with energy, which emit CO2
and other greenhouse gases. This leads to global warming and climate change.
To break the cycle, some investors have begun financing developments that don’t hurt the planet.
This is called “sustainable finance” and it is a growing part of the global economy.
In 2019, US$137.3 billion flowed into sustainable mutual and exchange-traded stock funds, which invest in companies that take steps to save the environment. That’s still less than 1percent of the money invested in securities globally, but sustainable investing is growing fast.1
Investors also loan money to companies that build renewable energy projects, and social welfare programs. In 2020, about US$375 billion went into green and social bonds.
Abu Dhabi’s Masdar is a leading investor in renewable energy and sustainable technology.
With operations in more than 30 countries, the gross capacity of the renewable energy projects in which the company is committed to is close to 11 GW, representing a total investment of almost US$20 billion.
Displacing an estimated 20 million tonnes of carbon dioxide each year, these projects include the largest wind farm in the West Balkans, Cibuk 1; Shams 1, the world’s largest concentrated solar power plant when inaugurated in 2013; London Array, one of the world’s largest offshore wind farms; and Shua’a Energy 2, the 800 MW third phase of the Mohammed Bin Rashid Al Maktoum Solar Park in Dubai.
Masdar is also creating new sustainable finance instruments, such as a “green” Real Estate Investment Trust (REIT), designed to attract outside investment into Masdar City, Masdar’s home in the UAE.
Masdar cares about sustainable finance because its mission is to advance the commercial adoption of renewable energy and sustainable real estate solutions, not just in the UAE or the Middle East, but around the world.
The key to our future lies in the decisions we make today, and sustainability should be part of all investment decisions.