On Monday, the Great Lakes Impact Investment Platform–an initiative begun by the Conference of Great Lakes St. Lawrence Governors and Premiers to promote economically sustainable economic growth in the U.S. Great Lakes states and Canadian provinces–announced that it has attracted close to $4 billion in investments in just the past year and a half.
Launched in 2020 by GSGP in collaboration with The Nature Conservancy, the School for Environment and Sustainability and Center for Smart Infrastructure Finance at the University of Michigan, and Environmental Consulting & Technology, Inc. (ECT), the platform aims to reduce nutrient inputs to sensitive watersheds by 20 percent, increase energy efficiency by 10 percent and reduce emissions by 10-15 percent.
The platform supports a variety of investment strategies such as green bonds, green lending, real assets and environmental impact bonds, with the aim of helping investors and individuals, governments and organizations to “be creative” in the ways they can develop, finance and pay for environmental and sustainability projects.
The Great Lakes region holds about one-fifth of the world’s surface fresh water and 85 percent of North America’s. The platform focuses on projects in the Great Lakes St. Lawrence River basin, as well as projects anywhere in the region’s states and provinces. This includes projects affecting groundwater, the Mississippi and Ohio River watersheds, Hudson Bay and the Atlantic Ocean.
“Québec used the power of green bonds to fund projects that save energy and reduce emissions. The Great Lakes Impact Investment Platform allows the province to promote this work while tracking the environmental performance,” said Guillaume Pichard, managing director, Ministère des Finances du Québec.
“As Michigan and the rest of the Great Lakes region grapple with the impacts of climate change, the Great Lakes Impact Investment Platform is an important new way for our companies, public agencies, and other organizations to align their investment decisions with critical environmental improvements,” said Liesl Clark, Director of the Michigan Department of Environment, Great Lakes and Energy (EGLE).
“The Platform seeks to attract more impact investment in the region by highlighting successful projects,” said David Naftzger, Executive Director for the Great Lakes St. Lawrence Governors & Premiers (GSGP). “With more than $17 trillion in assets under management in the U.S. being directed to sustainable, responsible, and impact investing – and $30 trillion being similarly invested globally – the Platform aims to highlight the abundant opportunities to make globally significant environmental impacts by investing in our region.”
Current projects being funded through this investment platform include an initiative by the Buffalo (New York) Sewer Authority, which has issued the largest-ever Environmental Impact Bond (EIB) to capture stormwater, reduce sewer overflows and add 700 jobs. The $54 million issuance uses a creative, outcomes-based financial instrument to design and implement green infrastructure. Essentially, the better and faster the environmental improvements, the lower the financial repayment for the authority.
“Our green infrastructure program is framed to make Buffalo a greener, healthier, and more equitable city,” said Oluwole “O.J.” McFoy, General Manager of the Buffalo Sewer Authority. “It is good to see other greening initiatives on the Great Lakes Impact Investment Platform as, collectively, it helps to showcase the region as a leader. In addition, cumulative data points on the region’s greening progress are further useful as it brings transparency to how we are addressing community resilience.”
In Detroit, Michigan, DTE Energy subsidiary DTE Electric Company completed its third green bond in March, bringing its total in green-bond issues to $2 billion. The bond is being used to finance clean energy projects including the construction of solar and wind farms and strengthening energy-efficiency programs that help Michigan residents and businesses save energy and reduce bills.
In Indianapolis, Indiana, Citizens Energy Group, the City of Indianapolis, the Indiana Department of Environmental Management and the U.S. Environmental Protection Agency are engaged in a $2 billion project supported through the Great Lakes platform to nearly eliminate combined sewer overflows into area waterways.
And in Madison, Wisconsin, the nonprofit Savanna Institute is using various financing tools –including green lending–to work with farmers in Wisconsin and Illinois to show how the addition of perennial crop trees to conventional row-crop and livestock farms can reduce carbon emissions, promote biodiversity and improve both environmental and economic outcomes.
In addition to showcasing successful projects already underway, the platform is actively seeking additional projects that fit into its target impact themes of forestry, smart water systems, agriculture and energy.
