Victory Hill Capital Partners LLP

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Despite backlash, sustainable investment opportunities soar

Tuning out the anti-ESG rhetoric, institutional investors globally are charging ahead with opportunities to finance a sustainable future.

The number of sustainability-focused projects around the globe has grown rapidly in recent years, from hydropower plants in Brazil to electric bike infrastructure in India and power transmission lines in the American West, plus scores of other approaches.

The need for sustainable-minded investments is growing, notes the United Nations' 2023 Financing for Sustainable Development report.

This is especially true when it comes to addressing climate change. Meeting the Paris Agreement goal of limiting the global temperature increase to 1.5 degrees Celsius above pre-industrial levels will take an estimated $126 trillion investment in climate solutions, according to the Institutional Investors Group on Climate Change, a European membership body for investor collaboration with more than 400 pension funds, asset managers and other members representing 26 countries and a collective €60 trillion ($65 trillion) in AUM.

Richard Lum, managing partner and co-CIO of private equity and infrastructure manager Victory Hill Capital Partners LLP in London, whose £457.2 million VH Global Sustainable Energy Opportunities fund targets climate and energy-related infrastructure investments, thinks the rising price of carbon provides further incentive for renewable energy, but cautions that long-duration storage to address some of renewable energy sources' intermittency problems is still not economically attractive. So investors need to prepare for "a post-subsidy world" and consider other approaches, like smaller power generation closer to customer demand, he said.

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