Ray Dalio says green finance has to be profitable

investmentnews.com:

After a particularly bad year for green investing, the founder of the world’s biggest hedge-fund firm has just set the record straight.

Ray Dalio, the billionaire founder of Bridgewater Associates, reminded delegates at the COP28 climate summit in Dubai that private capital can only realistically get involved in financing climate solutions if the returns make sense. 

“You have to make it profitable,” he said in Dubai.

It’s a mantra that’s reverberating across the sprawling, sun-filled campus at which this year’s Conference of the Parties is being held, with representatives from Wall Street including JPMorgan Chase & Co. and Bank of America Corp. all underlining the point.

Attendees arrive at the Blue Zone at the COP28 climate conference at Expo City in Dubai, United Arab Emirates, on Saturday.

It’s part of a wider pivot in the messaging from the finance industry. Two years ago at the COP26 summit in Scotland, the Glasgow Financial Alliance for Net Zero unveiled commitments it said represented $130 trillion in financial assets. Hailed at the time as a “watershed” moment, bankers at this year’s COP have been at pains to attach conditions to such headline figures.

“You need availability of projects; there may be $130 trillion or more of capital, but it is return-seeking capital, so you need bankable investments that actually provide appropriate risk and return,” Ramaswamy Variankaval, JPMorgan’s global head of corporate advisory and sustainable solutions, said in an interview in Dubai. “That’s what we’re all looking for.”

As it becomes increasingly clear that private capital will need to be deployed in a big way to help fight the fallout of the climate crisis, bankers and investment managers are using the COP28 summit to