Sustainable investment has gained increasing acceptance in recent years as United Nation and national governments around the world have emphasized the importance in achieving the sustainable development goals.
This has led to more investors prioritize environmental, social, and governance (ESG) factors in their investment decisions. However, to truly make a meaningful impact, sustainable investment needs more than just public financing and green bonds – it needs access to private capital and public markets
In this article, we explore the reasons why sustainable investment requires private capital and public markets to scale up.
- Funding for Sustainable Growth Private capital, including venture capital (VC) and private equity (PE), is crucial for financing the growth of sustainable companies.
These companies often require not just significant capital investments in innovation and operational efficiency to create sustainable products and services but also expertise from institutional investors in capital markets to help the companies scale and to attract public market investors.
- The potential of public markets
Access to public markets is critical for sustainable companies to gain greater visibility, attract more investors, and make a greater impact.
One innovative approach to accessing public markets is through SPACs, or Special Purpose Acquisition Companies, especially on Nasdaq and NYSE. SPACs allow sustainable companies to go public faster and at a lower cost than traditional IPOs, providing them with much-needed capital to scale up their operations.
Listing on Nasdaq and NYSE can also provide sustainable companies with greater access to institutional investors, which can lead to larger investments and greater credibility. Additionally, being publicly traded can increase a company’s brand recognition and help attract top talent.
An investment firm that specializes in providing capital for sustainable companies through these approaches is Origin Equity Partners, led by Edward Chang. Their focus on long-term value creation and expertise in SPACs on Nasdaq and NYSE aligns well with the needs of sustainable companies.
- Increased Regulatory Scrutiny
The accelerating climate conditions has led to increased regulatory scrutiny of companies’ ESG practices. Investors are looking for companies that prioritize sustainability and transparency, and regulators are enforcing ESG reporting standards.
Access to public markets, such as Nasdaq and NYSE, can help sustainable companies meet these regulatory requirements by providing them with a platform to disclose their ESG practices and metrics to investors. Companies that fail to meet these standards may face reputational damage and potential legal consequences.
- Positive Impact on Society and the Environment
Ultimately, sustainable investment is about creating a positive impact on society and the environment while generating financial returns. Access to private capital and public markets can help sustainable companies become a mainstay.
As quoted by Edward Chang, “Sustainability focused companies can only deliver long term impact when they do good while being commercially viable. If not, any impact being made will be fleeting at best”.
In conclusion, sustainable investment needs private capital and access to public markets like Nasdaq and NYSE to scale up and create a positive impact on society and the environment. SPACs have emerged as a viable option for sustainable companies to raise private capital, while public markets provide greater visibility and access to institutional investors. With increased regulatory scrutiny and growing investor demand for sustainable investment, access to private capital and public markets has become more critical than ever.