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The Need For A Global Green Investment Bank

Managements of emerging technology companies currently spend two out of the first three years on the road raising money

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The economic, social and environmental health of civilisation depends on key resources, such as air, food, water, energy and medicine. The Paris Climate Accord of 2016, is an unprecedented example of international collaboration.

To date,195 countries have agreed to work together to combat the greatest threat to civilisation – the ravages, of climate change. The development of technologies, which provide solutions in a sustainable fashion is an essential part of the battle. This requires financial resources, intellectual effort and efficient, purposeful investment. These necessary conditions and resources do not exist, sufficiently.  

Efficient paths for governments to make use of available public funding to mobilise much larger pools of private capital, do exist. These paths can be activated and put to use. Effective activation will drive significant results for low capital usage, unlike in the current situation.
The private sector is experiencing investment capacity limits. These limits arise because there are confidence gaps among investors, given the risks associated with the technology. These risks comprise lack of transparency and consistency in government policy on incentives and subsidies; and the high capital requirements for commercialisation.  

Managements of emerging technology companies currently spend two out of the first three years on the road raising money. This is not efficient. There is a requirement now for a global finance institution to fund innovators more effectively - the end goal must be the success of technology development rather than to squeeze the maximum profit for an investor at the expense of founders, management and creative genius.  

Billionaire philanthropists have created numerous structures for rolling out “projects”, which deploy 15 year-old technologies; the pace of growth in new technologies is not fast enough. Key opinion leaders agree that mobilising investment from the public and private sectors together, will be vital if we are to meet climate change goals. However few, clear, action plans exist for achieving these goals. A global green investment bank is needed to bring specialists together to create and implement solutions, immediately.  

National green investment banks exist already and are established typically in countries that do not have national development banks (NDBs). In many countries NDBs are struggling to understand technologies, implementation mechanisms and financing tools in an effort to implement green rhetoric from national and local leaders.  

Existing green investment banks are tailored to national and local contexts and are rarely given the tools to operate efficiently. Ambitions include supporting local community development, lowering energy costs, developing green technology markets, creating jobs and lowering the cost of capital; but there is little common or shared knowledge of best practice to tap into. A global approach will help all countries succeed optimally by drawing together and sharing knowledge in technologies, intellectual property, deployment, execution and reporting. Part of the solution will be to associate sustainability with a respected name. A name that has been associated for a 100 years with innovation that benefits mankind in areas such as physics, chemistry, medicine, literature and peace. It has been agreed that the Nobel name will be an integral part of a global green investment bank initiative.  

This new global banking initiative will fund the Nobel Sustainability® Trust and the new Nobel Award for Sustainability. It will open up flows of investment by collecting knowledge, sharing it and bringing best practice to bear at scale.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

Mungo Park

The author is Chairman, Innovator Capital, London

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