In a new paper, we show that there is empirical evidence of historical outperformance of green infrastructure investments (defined narrowly as wind and solar power projects). We then consider whether this finding implies continued future outperformance. In line with the literature, we argue that more sustainable infrastructure investments should in fine have lower expected returns than less sustainable ones, but that the recent shift in investor preferences in favour of greener power investments temporarily created excess demand, explaining realised performance during the past decade.
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