Ridhhima Yadav

Here's what you hear on the Investor Roadshow.

Ah, I'd love to invest in you, but my policy prohibits me from having exposure to coal.

Or I'd rather not have the NGOs demonstrating on my doorstep if I start working with you.

Or I'd love to invest in you, but I have a net-zero portfolio target, and that'll increase my emissions.

So after a long and arduous process of no's, you go back home and wonder, should you just scrap the plan or should you stick to it and use your own balance sheet capital?

You stick it through, and then you go to your shareholders for approval to allocate the capex.

But your shareholders are not happy because that affects their dividend.

Congratulations.

You've officially found yourself in a transition trap.

You want to transition, but your hands are tied.

So as investors and financiers, this dynamic of potentially starving companies of capital is likely to put them back into their status quo, or worse still, put them into the hands of investors who don't really care about the climate.

So how do we prioritize progress over perfection?

By building trust.

Because trust, and I say this as a financier, trust and not capital is the key currency for the energy transition.

We need to put trust back on the climate finance term sheet, and we can do that by mobilizing finance with less strings attached.

As an example, in the recent past, several countries, including major economies, have refused financing packages on clean energy transition offered by several countries in the global north because they're concerned that they're being asked to commit to goals in exchange for capital that may at best come in a trickle or at worst increase national debt levels.

That erodes trust.

So if we are to truly crack global climate finance partnerships for the South, we need to make it easier and faster for entrepreneurs and those countries to access that capital.

We need to put that capital to work to scale the clean energy ecosystems and systems in those countries, but we also need to provide the enabling infrastructure in the interim period to ensure a stable and secure grid and supply.

We can all work together on this, because we know that if we expand the investable universe by expanding the scope of what is included, we can together ensure that finance reaches every part of the global economy.