The capital requirements to meet global energy demand are massive and unmet, particularly in light of serious economic, social and environmental realities. Global investment in renewable energy, for example, is tracking at less than one half of the level required to achieve the International Energy Agency’s 450 ppm CO2 Scenario, which would avoid the worst impacts of climate change. Even for those investors committed to a low-carbon thesis, significant barriers exist. In September 2013, twenty-five investors who manage money on behalf of endowments, foundations, family offices and sovereign wealth funds met at the Stanford Management Company to identify barriers to limited partner (LP) investment, and to explore innovative vehicles to achieve superior risk-adjusted returns across the clean energy sector. According to workshop participants, barriers to LP investment in the clean energy sector were significant, and success stories at the fund level were rare.
This report summarizes views participants expressed in the workshop. In addition to summarizing the discussion for those in the room and other interested parties, this document sets the stage for the Stanford Steyer-Taylor Center’s future research agenda in this area.