Quick Read: Looking Forward to 2025, Politics Aside

In3’s role as an impact investor, venture catalyst, and ESG advisors, helping to create a more sustainable and resilient future, has never been more vital. “Sustainable investing identifies unmanaged risks and unlocks investment opportunities in order to safeguard and increase long-term portfolio value,” says Sustainable Investment Forum (SIF). Investors require transparency through clear reporting requirements, the ability to engage the companies they own on financially material issues, and certainty that policymakers will support robust climate action. That remains true regardless of the political landscape.

One of the best aspects of working in the private sector is our ability to largely ignore politics. We work with everybody, and although change is inevitable, we can thank long-term relationships and the strong projects that get funded and built for a bright future. Most of the new projects benefit diverse stakeholders, which get implemented whether the prognosis is that we have little time to act because a) Acting now will help fend off the worst effects of climate change, for example, or b) Existing incentives that have helped accelerate US renewables will soon disappear. The answer is the same.

Government subsidies are simply not necessary

Renewables and similar carbon emissions reduction and nature-based carbon storage solutions are already safer and more profitable than conventional energy, especially when “smart” and next generation solutions are employed such as efficiency and waste-to-value. These are even more profitable and scalable with government incentives, but we need not rely on them.

For example, US Federal and State-level Tax Credits for “doing the right thing” have been around for decades. Whether that means their time has come or that they will outlast any given political regime, we will have to wait and see, but having never relied on them in the first place, precisely for that reason — they are subject to the political winds that blow.

The playing field is already unlevel enough that, worst case, we really don’t need governments to make it more so. Strong projects stand on their own merits, where carbon credits, tax equities, and other tools usher in a more just and sustainable world … so developers and investors are advised to make (sustainable) hey while they last.

The economy tilts toward lasting value, and market manipulators eventually get their comeuppance. In other words, good business always works, no matter what the political climate.

What about inflation?

Seems there are already fears that, despite the rhetoric, the next US administration will increase the deficit, ignore prudent monetary policy, and cause a resurgence of inflation. That means interest rates will go down a bit but eventually will go even higher.

We earlier responded to the higher interest rates by simply eliminating our clients’ interest expense (was never a profit center, and less profitable projects became infeasible) — instead using minority equity funding for up to 100% of the project’s budget. If interest rates come back down, that will enable developers to affordably leverage debt (when profitability thresholds are met and loans still amortize) while keeping incrementally more of their own equity.

Although we are headquartered in the US, we’ve always had global reach, and prioritize developing and emerging markets in our investment strategy, a large part of social justice in that most of these countries had no part in creating the climate mess, but can be and often are part of the solution.

For example, housing is another bipartisan issue. Healthy food and food security . . . Living with decent quality of life — access to clean water, clean air … these all transcend political ideologies. Further, we need to work together without regard to political views to get things done, as we always have. We help create good jobs, meaningful work, and professional roles that withstand political polarization, delivering essential value. That never gets old.

Have you noticed that the natural world doesn’t actually need us?

The opposite is not true. We rely on ecosystem services just to sustain life, like clean air, clean water, and much more. But even if our society makes a bigger mess of the climate (short-term thinking tends to perpetuate profit centers of the past rather than seeking to innovate new, more sustainable ones), nature will prevail. Just as we witnessed during the Covid Pandemic, nature moved back into the places and spaces we humans had previously occupied. Overall energy consumption declined as people “sheltered in place,” and degraded lands were given a chance to bounce back.

Worst case, even if we neglect or ignore our overall role with repairing the environment and healing the toxic political environment in the near-term, causing greater risk down the road for subsequent generations, there has never before been such a uniting force as planetary health and sustainability, now much more prominent in decision making. Because no matter how you vote, we all live here.

This offers hope and prosperity while doing the right things. Something much more rewarding than living in fear about what the future may hold, such as whether or not we’ll survive the next climate-related natural disaster.