This type of investor is also the most interested in the flexibility mechanisms of the Kyoto Protocol, as indicated by their participation in the various precursor instruments such as joint implementation and the Carbon Investment Fund, probably because they can see benefits beyond the strictly financial ones. For listed companies in developing countries, issuing new stock is an option for raising capital that can be attractive. Doing so enables risk capital to be raised, without involving loss of control, for example to overseas partners, and enables investment in several needed areas, which may include energy efficiency or environmental technologies, without changes to management or business structure. However, the vast majority of portfolio investors will place little direct importance on the investment in environmental technologies, and will instead consider more general aspects of the firm and management's track record when deciding to purchase the new shares. Furthermore, the ability to raise such capital cannot be guaranteed, and depends on market conditions and on the company's performance at the time.
Venture capital is particularly relevant to the development and transfer of new technologies.
Venture capitalists have a relatively long-term focus, aiming to hold companies for several years before selling them, and have a more active approach than most other types of investors, in terms of participating in management of the company. This means they can play an active role in supporting technology transfer if it forms part of the business development plans of their investee companies. Venture capital is largest in the US but has grown recently in the rest of the world, including in developing countries where multilateral institutions have provided substantial support. Venture capitalists have tended to focus on high-return sectors such as computer software and biotechnology, and to date only a relatively small amount of finance has gone into environmental business, and only a few funds focus on environmental ventures. Indeed, the environmental sector has had a very mixed track record in delivering returns to investors.