Towards a framework for understanding investment channels: Financing instruments and funds

This chapter proposes a framework for understanding how institutional investors, specifically large pension funds, allocate capital to sustainable energy investments in projects or “corporates”. The analysis is supported by 47 actual investment cases collected for the purpose of this report and described in detail. The chapter introduces a framework for understanding investment channels by constructing a classification system. Tabular and visual devices illustrate how the classification works for different types of transactions. “Investment pathways” illustrate decision processes, including the choice between direct or intermediated investment, in projects or corporations. “Matrix frames” visually plot transactions together and display trends. A “schematic overview” visual device is used at the level of a single transaction to highlight how instruments, funds, risk mitigants and transaction enablers have all come together in a specific investment example. The chapter concludes with how the framework can be used in the future.