A newly formed alignment of legal, financial, and investment interests will direct "trillions" of U.S. dollars over the next 10 years into evolving markets linked to climate change, clean technology and sustainable use of natural resources, according to a report being prepared for the United Nations.
"The Working Capital Report," to be published in March 2006 by the United Nations Environment Programme Finance Initiative, is the culmination of a series of studies conducted during 2004 and 2005.
What was once considered a financial niche area is poised to become mainstream as institutions with trillions of dollars under management embed environmental, social and governance thinking into their investment approach, UNEP said in a statement released simultaneously Tuesday in London, Melbourne, Nairobi, New York, Paris and Tokyo.
"There is no question that 2005 will be seen as the watershed when the mainstream banking, insurance and investment worlds realized the scale of the commercial opportunities unfolding in the new carbon, clean-tech and sustainable natural resource markets and, also, the legal risks of not being a leader in this area," said UNEP Executive Director Klaus Toepfer.
Financial institutions working with UNEP predict that greenhouse gas emissions trading markets could reach US$2 trillion a year by 2012 and that the market providing finance for clean energy technologies could reach US$1.9 trillion by 2020.
That far more than any previous estimates for these markets.
