Environment and Energy

Climate change and its consequences are among the most urgent problems in today’s society. Many regions around the globe have clearly already been affected. Fossil fuels are becoming increasingly scarce and rising prices lead to significant social strain and political conflicts. Nevertheless, economic growth and elevated consumer needs result in steadily increasing fossil fuel consumption worldwide. Countries lacking raw materials are becoming more dependent on imports, thus augmenting the burden on both national budgets and private households. At the same time, the burning of fossil fuels further contributes to the greenhouse effect. Breaking this cycle is one of the major challenges in the coming years.

Strategies to reduce the use of fossil energy resources are therefore becoming more important. The implementation of alternative technologies – and they do exist – also depends heavily on the availability of pertinent information and sufficient capital. By financing investments that focus on the protection of energy and resources, banks can play a leading role in this area.

IPC provides financial institutions with specialised support in the development of credit instruments to facilitate investments in energy efficiency and renewable energy and in environmental protection and resource security. Potential target clients for these products include private individuals seeking to improve energy efficiency in their households as well as SMEs, including agricultural businesses, aiming to reduce energy consumption in their production processes or in the provision of services. By investing in environmental protection measures, modern machinery and energy efficiency in business premises, these companies can ultimately gain a competitive advantage in their markets.

Furthermore, we have adopted several approaches to sustainable energy financing which allow us to address a broad spectrum of clients and investors: The services offered by the banks that we advise range from financing for small, standardisable projects (e.g. energy-efficient machinery, lighting, vehicles) to larger, more complex measures (e.g. energy-efficient production systems and building projects) and large individual projects (especially in the area of renewable energies).

Most importantly, we help banks to design and implement services that are usually new to the partner institution; these generally take the form of new products, as funding is often linked to specific credit lines that require clear and measurable proof of energy savings or the reduction of greenhouse gasses (using CO2 emissions as an index). Therefore, on the basis of local surveys and calculations we provide support in the creation of lists of recommended measures with simple and clear selection criteria. We conduct feasibility studies, energy audits and impact analyses, support the development of special lending processes by the bank, formulate recommendations for the monitoring of funds and develop effective marketing concepts to introduce the new credit products.

In addition to advising banks on the introduction of green finance products, we also assist banks by evaluating their loan portfolios in terms of specific social and environmental risks.

In most of the countries where we operate, very little information is available about global warming or its causes and effects, and many people are unaware of the long-term environmental impact of their actions at home and in the workplace. As a result, an essential part of our work is the transfer of general knowledge about these issues with the aim of raising awareness and institutionalising environmental topics. Financial institutions that take environmental concerns seriously even implement resource protection and innovative concepts on their own premises. This move enhances an institution’s capacity to secure suitable positioning for their new green finance services and also presents a convincing image to the public.

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