Tips for financing sustainable transformations
Don’t limit your thinking to borrowing money or issuing new stocks or shares. Apply a bit of imagination to look for alternative sources of funding that are aligned with what you want your project to achieve:
- List the positive sustainable benefits the project will achieve and the negative impacts it will avoid. Use this list to search for innovative forms of sustainable funding that match those impacts.
- Search for industry- or business-specific grants and subsidies that cover the sustainable impacts of your projects. If you feel your project doesn’t fit, consider modifying it accordingly.
- Search for nongovernmental organisations, charities, or philanthropic foundations that share your aspirations and where there can be a meaningful collaboration. Don’t be afraid to undertake pioneering projects where you can be an exemplar for these organisations. Often funds are available for these innovative, transformative projects.
- Search for targeted financial products or sources of funding linked to the potential impact of your project, eg, impact investors or sustainability bonds.
- Consider blended finance products that combine public and private sources of funding.
- Consider joint ventures with other commercial businesses, as this may make the project more investable for finance providers, eg, by having large enough scale, shared risks, and reduced set-up and monitoring costs.
- Keep an eye on market innovations, as the finance market is dynamic, agile, and fast-moving. Don’t discount crowdfunding and even consider pre-selling sustainable products.
- Always consider the after-tax cost of any financial instruments, as different funds and projects may have different tax treatments.
- Check for any additional disclosure requirements, enhanced assurance, or accountability requirements attached to the funding, as this could add to the cost.