Reading about the drivers and blockers in sustainable finance can often leave one wondering where to find the discrepancies. There is no shortage of money looking for somewhere to be invested. Equally, there are huge environmental and societal problems that could be solved to everyone's gain, including financially, if only there were the funds. And there has never been a shortage of intelligent people coming up with potential ideas. So you might be forgiven for wondering how these three groups keep missing each other.

The risk factor
One unaccounted factor is risk. Many sustainable solutions, however innovative, require high start-up costs and initial investment. The smaller and more agile organisations (which tend to be the ones with the ability to create pioneering products) often lack the resources or cash reserves that will reassure lenders, who are understandably wary of handing over large sums to very small companies with few assets. However, the larger organisations who want the end products - and which have sufficient assets to borrow against - often lack time, capacity, or risk appetite to devote to large scale research and development.

A new alchemy
What is needed is a 21st century form of alchemy. But unlike the philosopher's stone, it does exist. And it lies in new ways of applying structured asset finance. Earlier this year, we were able to help an energy storage company secure funds to provide batteries to electric buses. It is unlikely any such company would have been able to find a normal lending agreement at the scale needed to proceed. Equally, as the electric batteries and infrastructure are by far the most expensive component in an electric bus, it is doubtful that bus companies would have been able to countenance the switch themselves.

However, there was a third way. By leasing the batteries to the bus operators and securing funding against the income streams from the leases - through a contracted receivables arrangement - it was possible to enable the rollout of a huge EV project to bus operators across three of the UK's largest cities, with more  set to follow.

Structured asset finance benefits
This sort of structured asset finance arrangement has multiple applications, and is now being seen across a number of sustainable sectors. We are seeing such arrangements being used to fund the creation of biofuels from dairy waste - securing funding to build a plant in Lockerbie against the income stream from selling the gas. They have also been used to fund wind turbines, processes that turn used oil from restaurants into power, and even a device that deters hungry seals from burgling sustainable fish farms off the coast of Scotland. These are ventures that might never otherwise have got off the ground.

For the lenders, the advantages are equally clear. They can invest in clearly beneficial environmental, social, and governance (ESG) products with much greater confidence and less risk. As the market for sustainable finance booms, and with customer demand higher than ever before, this is a way to channel investor capital into projects where it can really make a difference - and make a profit.

As businesses and investors alike recognise not only the need for sustainable products and services, but also the opportunities they present, we will need more of these arrangements to put lenders, innovators and customers together. There is no limit on what could potentially be achieved. If alchemy was about turning lead into gold, then this is a way to put gold to work for the better.