Clean energy investing can make financial as well as climate sense, according to a new report from Imperial College Business School.
Unlisted renewable assets outperformed the broader unlisted infrastructure assets, as well as the listed market benchmark, MSCI ACWI, over the past ten years at a diversified index level, according to the latest report by Imperial’s Centre for Climate Finance & Investment.
The report is the third in a series of joint reports with the International Energy Agency (IEA), aimed to establish greater transparency for institutional investors by analysing the financial performance of unlisted renewables and infrastructure assets globally, including emerging economies.
The findings make it evident that for clean energy transitions to be successful, institutional investors, corporates, and governments need to increase the funding of the renewable infrastructures globally – particularly in emerging and developing economies. But does investing in renewable infrastructure make sense from a financial perspective?
The report reveals that unlisted renewable assets generated superior returns on investment than the broader unlisted infrastructure assets and listed market benchmark (MSCI ACWI) over the last 10 years, with lower annualised volatility (10.92 per cent) and higher annualised Sharpe ratio (1.23).