Investment Sustainability

 

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Much attention has been devoted recently to the question of sustainable investment – both in terms of unsustainable practices in the financial sector and in terms of the unviability of exploiting carbon assets – the stranded assets argument.

Meanwhile:

  • The attractiveness of long term reliable income streams from sustainable energy supply and efficient use of resources in processes is already and increasingly recognized as providing a sound investment base for investors of many types eg. pension funds, life insurance companies, infrastructure investors, for the long component base of hedge funds and even individual savers
  • However any such planned technical solution (or any technical proposition at all) needs a quality assurance mechanism to minimize investment risk for such investors
  • The thermodynamic methodology we use allows a project sponsor to identify the reliability of the principal concept but and also more accurately quantify cost estimations in the very early stage of any project
  • It also provides a technical basis for a structured approach to timing of capital investments into projects across a demand life-cycle.

Physical precision and clear identification of any sustainability impact in terms its resource efficiency are a main benefit of this thermodynamics approach. Its simplicity allows best possible information, because of the simplicity of the information content, about quality of processes – and hence of policies – and thus provides a valuable tool for investment appraisal, decision making and investment management starting at the very early stage of any project and continuing as a monitoring process during the life of the project.

In terms of investment analysis therefore GeoCapita assesses the viability of projects using traditional methods enhanced by utilization of Monte Carlo Simulation and Real Options Analysis but also we consider carefully the overall economic benefits by considering the entropy effects and the Economic Value Added of investment opportunities.