Mayors innovate ahead of markets

There may be political gridlock regarding climate change inside the beltway, but not at city hall. Thanks to a partnership with the Carbon Disclosure Project (CDP), the mayors of 110 global cities are focused on reducing GHG emissions at the city-wide level.

Metropolitan political leaders in Atlanta, Las Vegas, Houston, Los Angeles, New York and Washington, DC, among others, have discovered that taking action on climate change is making their cities richer, more attractive to new businesses and healthier places for citizens to live and work—an average $40 million in savings yearly.1

It Adds Up

A few examples: Los Angeles retrofitted 4,400 traffic signals and 100,000 plus streetlights, saving $11 million per year in electricity and repair costs. And Washington, DC’s Housing Authority has retrofitted 5,400 of its 8,700 residential building units, for a yearly savings of $3.9 million in electricity costs and $2.4 million in operations and maintenance costs.2

Investment Opportunity

Let’s look at the big picture for investors: In the US, existing buildings account for nearly 40 percent of total energy use.3 This means we have the investment opportunity and we have the technology to make these buildings more energy efficient. Industry analysts have estimated the potential energy efficiency investment opportunity in the hundreds of billions of dollars.3

I, for one, would like to see these mayors lead the utility regulatory and finance-enabling policy initiatives that together can help create the fixed income securities market for energy efficiency loans. In fact, their leadership is prompting the capital markets to consider the opportunity to syndicate energy efficiency retrofit loans for commercial real estate investment portfolios.

Then advisors can use the awesome power of our capital markets to position institutional and retail investors in high quality, climate change focused fixed income portfolios that create wealth and manage risk at the same time.

Stay tuned for updates on this exciting opportunity for expanding the fixed income investment options that will contribute to making our cities richer, more attractive to new businesses and healthier places for citizens to live and work.

1,3 “Wealthier, healthier cities: How climate change action is giving us wealthier, healthier cities,” CDP cities 2013 report, www.cdp.net.
2 U.S. Department of Energy, Buildings Energy Data Book, 2011, Table 1.1.3, http://buildingsdatabook.eren.doe.gov.