Renewable energy is at the center of a necessary transition to a low carbon economy, as well as a secure supply of clean, constant energy. But, in order for this transition to occur smoothly, there must be a shift in how industry leaders approach compliance. Renewables are now at a point where the technology itself is mature enough to handle a widespread market introduction; however, progress is being hindered by perceived risk. This risk has created a chasm between promoters of renewable energy projects and the financial organizations—namely venture capitalists and project finance teams— from which they seek aid.

In order to shift this paradigm and make it easier for financial organizations to support renewable projects, there are several things executives in the energy industry need to understand. Since risk is such a deciding factor in whether or not renewable projects are funded, de-risking is a necessary effort toward increasing a project’s chance for success. Working with new technologies in new regions introduces new risks that need to be identified and managed from the beginning of the development process. Fortunately, there are software technologies that digitize not only the project management component, but also the investment management process, providing executives with the visibility they need to identify and mitigate risk as quickly as possible.

Adapting to the new reality of the evolving energy landscape will enable industry leaders to gain a significant competitive advantage. To do so, the industry must also implement more structural changes to not just federal and regulatory requirements, but to its own compliance processes as well. Establishing more effective and sustainable risk and internal-control frameworks are some of the ways the industry can evolve to present itself like a mature asset class—and get funded as such.

Furthermore, energy companies need to rethink the structure of finance as a department serving in an advisory function to an entity with direct influence on risk management and monitoring. Risk is not simply a finance problem; and organizations need to adopt a model where business-unit coverage is combined with horizontal expertise around key compliance areas, instead of allowing critical information to be siloed in multiple systems.

Additional responsibilities come with these energy changes, requiring unprecedented insight into business practices and necessitating new compliance practices. With an investment lifecycle management process, energy executives can institute effective risk-control frameworks and create a culture of compliance in which everyone is held accountable.

This visibility allows institutional leaders to connect regulatory requirements to breakdowns in process, monitor and measure progress from the top down and quantify and measure goals that are clearly tied to process. When leaders have insight into where their processes may be slipping through the cracks, they have the power to make changes before it can hurt their organization.