Why and How Do We Create a Sustainable Finance Hub?
Tom Croft, Managing Director of Heartland Capital Strategies, asked Joe Enright, Executive Director at GCM Grosvenor, to address the question of how do we actually build the architecture for sustainable finance hub? And could this vehicle could be both the medium and the message in terms of regional capital matching up to projects’ needs and renewing investment in the Ohio Valley?
Enright’s response was affirmative: “In my view, the sustainable [investment] hub, can be the preeminent sourcing channel for private capital.” He went on to describe GCM Grosvenor’s approach and history of making sustainable investments, “We believe a collaboration with union labor and key government stakeholders can unlock investment opportunities and drive quality risk adjusted returns.”
However, unlocking those opportunities is not always easy, Enright said. He has worked both in private capital and in government and observed he has seen difficulty in trying to find and source opportunities that matched investors objectives of having a positive environmental or labor impact, and governments trying to attract investors to these types of projects: “It’s disjointed. You have governments that have certain ideas, but [are] not exactly sure how to package them for institutional investors. You have institutional investors who aren’t entirely sure how to crack the nut to some of these municipalities to understand what’s possible.”
The solution could be the Sustainable Finance Hub. “I think the [sustainable investment] hub to maximize its potential, at the front end, advocating for these policies-- and getting local municipalities to enact these policies to create the opportunity-- then bringing in the private capital and present the opportunities to [them] to kick the tires on and invest,” he said.
This Hub could start matching investors with communities needing investments and then Enright thought “it will create a snowball effect.” Successful investments will spur more communities to create policies that spur responsible investment and “responsible investors, who are looking to expand their funnel of deal flow,” will see the benefit of “having one source to go to and say: ‘Hey, what do you got for us?’ It makes it a lot easier. . . I think you’ll have a lot more shots on goal.”
Click HERE for more about GCM Grosvenor's conversion of The Long Ridge Energy Terminal (in Hannibal, Ohio) into a hydrogen facility (pictured below).