Part of: Financing Sustainable Urban Development: An Introduction

Private sources of sustainable investments

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Private loans, the larger source of investment, are difficult to track. “Green tagging” is a process whereby banks identify the environmental attributes of their loans and the underlying asset collateral. Tagged bank assets can be tracked for loan performance providing greater transparency of climate risks and portfolio reliance (UN Environment 2017). 

According to a survey of lenders and regulators by UN Environment,[1] the following investments are more likely to be considered sustainable and therefore more likely to be eligible for financing. Thus cities should consider asking lenders for assistance in these areas: 

  • Improving energy efficiency and use
  • Reducing greenhouse gas emissions 
  • Reducing waste and increasing recycling and reuse

The 2017 UN report, Financing Sustainable Urban Development in the Least Developed Countries, describes ways cities can access private financing.

[1] The survey included 10 European banks: ABN Amro, BBVA, Berlin Hyp, HSBC, ING, Lloyds, SEB, Suedtiroler Volksbank, Triodos, and UniCredit.