Innovations in Sustainable Finance

Innovations in sustainable finance #8: Sorry, it's a law! Regulating Sustainable Investments with Lena Hörnlein

Aug 29, 2023

Lena Hörnlein from B-Capital Partners explains the interaction between sustainable finance regulations and their fund focused on energy transition assets. They discuss the criteria for Article 8 classification, challenges in regulating sustainable investments, and the importance of battery storage for grid flexibility.

49:20

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Episode guests

Lena Hörnlein

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Quick takeaways

B Capital Partners has chosen to classify as Article 8 under the Sustainable Finance Disclosure Regulation (SFDR) due to their strong sustainability practices and the desire to avoid constantly changing classifications.

The regulation has led to more precise reporting, engagement with portfolio companies, and a focus on principal adverse impact indicators, highlighting the need for more regulations targeting the real economy to incentivize the energy transition.

Deep dives

Overview of B Capital Partners

B Capital Partners is an asset manager based in Zurich that focuses on investments in sustainable infrastructure, particularly energy transition infrastructure. They manage funds and invest in renewable energy assets, battery storage, and EV charging infrastructure. The firm has a buy and hold strategy, holding assets for 7 to 15 years and generating returns for their institutional investors.

Introduction

2min

Investing in Private Market Assets and Infrastructure for Sustainable Finance

2min

Energy Transition Assets and Sustainable Finance Classification

8min

Stages of Sustainable Investments

24min

Exploring the Importance of Pies and Challenges in Regulating Sustainable Investments

2min

Understanding the Scope Three Emissions of Battery Storage and the Role of Grids

2min

Misleading Indicators in Sustainable Finance

10min

In this episode, I talk to Lena Hörnlein, a senior manager at B-Capital Partners. Our discussion revolves around the interaction between sustainable finance regulations, including SFDR, and the operational landscape of a fund exclusively centered on energy transition assets. Lena provides a detailed explanation of how the regulation works. Interestingly, Lena's fund has opted for Article 8 as opposed to Article 9, a decision grounded in caution. Ultimately, we conclude by underscoring the pivotal role of regulations in other domains, such as electricity markets, in expediting the progress of the energy transition.

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