Clos­ing the green fi­nanc­ing gap will re­quire stronger col­lab­o­ra­tion across stake­hold­ers, in­clud­ing Caribbean busi­ness­es, in­vestors, and reg­u­la­tors says Bri­an Hack­ett, Re­gion­al Ad­vi­so­ry Leader, and Ter­ri­to­ry Leader, PwC T&T.

In a state­ment re­leased yes­ter­day, Hack­ett al­so called for for more tax in­cen­tives and en­hance­ment of re­port­ing by pub­licly list­ed en­ti­ties on ESG (En­vi­ron­men­tal, So­cial and Gov­er­nance) re­lat­ed met­rics so in­vestors can make bet­ter in­formed de­ci­sions.

“In­vestors are mak­ing a clear call for stan­dard­i­s­a­tion, com­pa­ra­bil­i­ty and con­sis­ten­cy in re­port­ing to aid in green in­vest­ment de­ci­sion mak­ing.

“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,”Hack­ett ex­plained.

He said 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.

Hack­ett al­so 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 T&T’s 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 per cent 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 per cent of in­vestors sur­veyed say­ing they use them to a large or very large ex­tent.

“Caribbean or­gan­i­sa­tions 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 added.