Green Market-Makers: Sovereigns as Catalysts for Sustainable Development

35 Pages Posted: 27 Oct 2019 Last revised: 19 Nov 2019

See all articles by Paul Rose

Paul Rose

Ohio State University - Moritz College of Law; Bocconi University - BAFFI Center on International Markets, Money, and Regulation; Tufts University - The Fletcher School of Law and Diplomacy; Fundación Instituto de Empresa, S.L. - IE Business School

Date Written: October 17, 2019

Abstract

Sovereign investors are increasingly engaged in sustainable investing in both international markets and their own domestic markets. This paper argues that sovereigns are uniquely positioned to spark sustainable investment and explains why sovereign-led development of sustainable markets will be key to achieving the UN’s Sustainable Development Goals (SDGs). Sovereigns employ four primary market-making strategies — issuing securities, investing in private markets, brokering green deals, and creating green finance regulatory structures — to both create and sustain conditions suitable for the development of green finance and to create conditions that will foster the development of investible projects. The strategies often operate independently, through different arms of the government. While this specialization allows for synergies in catalyzing investment in sustainable development, sovereigns often also fail to coordinate their activities in ways that will maximize the impact of their diverse efforts. Sovereign sustainability investment also brings risks, including corruption, politicization, and the crowding-out of private investment. This paper outlines the steps taken by sovereign investors and government regulators to mitigate these risks.

Keywords: Sustainable investment, Sustainable Development Goals, green finance, sovereign investment

Suggested Citation

Rose, Paul, Green Market-Makers: Sovereigns as Catalysts for Sustainable Development (October 17, 2019). Ohio State Public Law Working Paper No. 516. Available at SSRN: https://ssrn.com/abstract=3471516 or http://dx.doi.org/10.2139/ssrn.3471516

Paul Rose (Contact Author)

Ohio State University - Moritz College of Law ( email )

55 West 12th Avenue
Columbus, OH 43210
United States

Bocconi University - BAFFI Center on International Markets, Money, and Regulation ( email )

Milano, 20136
Italy

Tufts University - The Fletcher School of Law and Diplomacy ( email )

Medford, MA 02155
United States

Fundación Instituto de Empresa, S.L. - IE Business School ( email )

Calle Maria de Molina 12, Bajo
Madrid, Madrid 28006
Spain

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