Closing the green financing gap will require stronger collaboration across stakeholders, including Caribbean businesses, investors, and regulators, says Regional Advisory Leader, and Territory Leader, PwC Trinidad and Tobago, Brian Hackett.
And he called for more tax incentives and enhancement of reporting by publicly listed entities on Environmental, Social, and Governance (ESG)-related metrics so that investors can make better informed decisions.
“Investors are making a clear call for standardization, comparability and consistency in reporting to aid in green investment decision-making,” Hackett said. “While there has been progress on green financing in the Caribbean, greater collaboration with international agencies is needed to strengthen the regulatory and financial systems to better channel financial resources to sustainable development projects.”
“There also needs to be greater access to affordable and attractive financing options for green initiatives, as well as more tax incentives for thematic funds or green bond issuers to spur investment in green projects,” he added.
Hackett noted that examples of financing for green projects in the region, included: Jamaica’s Social Investment Fund and JSE Green Bonds, the Barbados Blue Economy, and the Government of the Republic of Trinidad and Tobago (GORTT) budget initiatives.
The International Energy Agency estimates US$4 trillion annually in clean energy investment is needed by 2030 to address the impacts of climate change globally and meet net zero emissions targets.
While there is growing investor demand for ESG assets, Hackett said investors have a low degree of trust in corporate sustainability reporting.
According to PwC’s 2022 Global Investor Survey, over three quarters (78 per cent) said ‘unsupported claims’ were present to a moderate, large, or very large extent; while just two percent said corporate reporting does not contain unsupported claims about sustainability performance. Information from ESG ratings agencies does not appear to be filling the trust gap either, with just 22 percent of investors surveyed saying they use them to a large or very large extent.
“Caribbean organizations can show their commitment to sustainability, and address concerns about greenwashing by putting in place an effective ESG strategy and enhanced reporting on ESG related targets to help investors make more informed decisions,” Hackett said.
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