Green finance is often sold as inevitable.

Capital will flow. Markets will adapt. Technology will fix the rest.

Reality is less romantic - and far more instructive.

In this Offscript episode, we spoke with Michael Grohmann, former Managing Director at a European investment bank and now Board Member at Callirius AG, to unpack why climate finance, tokenization, and institutional capital move the way they do - slowly, cautiously, and with relentless attention to risk.

Capital Doesn’t Chase Narratives - It Chases Mandates

One of the most misunderstood things in Web3 and climate finance is who actually makes investment decisions.

From the outside, it looks simple:

• Interesting asset

• Good story

• Strong macro tailwinds

From the inside, none of that matters unless one condition is met first:

Does this fit my mandate?

Before a CIO even opens your deck, they need to know:

• Are they legally allowed to invest in this asset?

• Does the ticket size fit portfolio constraints?

• Does the liquidity profile match their book?

• Does the duration align with liabilities?

• Does the yield justify the risk capital required?

Miss any of these “hygiene factors” and the deal is dead on arrival — regardless of how compelling the climate narrative is.

This is why so many founders think institutions are “slow,” when in reality they’re simply constrained.

Trust Is the Real Currency of Finance

In theory, markets are rational.

In practice, they’re deeply relational.

Michael is blunt about this: introductions matter. Not because institutions are lazy — but because trust is a risk-mitigation tool.

A warm introduction from a known operator immediately:

• Reduces perceived execution risk

• Signals that due diligence has already started

• Increases willingness to spend time

Cold inbound pitches, no matter how polished, compete with dozens of others every week. Time is the scarcest asset on a CIO’s desk.

This is why capital formation still looks surprisingly old-school.

Why Deal Cycles Are Long (And Always Will Be)

Founders often ask: “What makes a deal move faster?”

The uncomfortable answer: timing and familiarity.

Deals stall when:

• A fund is managing redemptions

• Risk budgets are already stretched

• Market volatility spikes

• Internal committees are overloaded

Deals move when:

• The investor knows you

• They understand your asset class

• You’ve helped them before

• Your product fits cleanly into existing workflows

Capital allocation isn’t a sprint. It’s a relationship-driven marathon.

And that reality doesn’t disappear just because the asset is tokenized or green.

Institutional vs Private Capital: Two Completely Different Animals

A key distinction Michael makes is between institutional capital and private capital — often lumped together, but fundamentally different.

Institutional capital:

• Operates under strict mandates

• Prioritises liquidity and risk management

• Moves via committees and formal processes

• Optimises for stability, not upside

Private capital:

• Accepts illiquidity

• Takes concentrated risk

• Moves faster

• Focuses on value creation over years

This is why infrastructure and climate projects often struggle to find a “home.” They’re long-dated, capital-intensive, and operationally complex — awkward fits for both sides unless structured carefully.

Institutions Aren’t Slow - They’re Regulated

Banks, insurers, and asset managers don’t exist to innovate. They exist to preserve trust.

Regulation forces them to:

• Hold risk capital against assets

• Optimise risk-adjusted returns

• Avoid exposures that look inefficient on paper

If an asset requires 120% capital coverage to earn a 15% return, it simply won’t be approved — no matter how virtuous the outcome.

This is why regulation, not technology, is the biggest bottleneck in finance.

Blockchain and AI may speed up settlement, reporting, and data flows — but they don’t remove capital requirements.

The Myth of “Tokenization Solves Everything”

One of the most refreshing parts of the conversation was Michael’s clarity on tokenization.

Tokenization is not a magic wand.

For equities, it only makes sense once settlement infrastructure is already on-chain. Tokenizing a liquid, well-functioning stock without changing settlement doesn’t add much value.

For carbon credits, tokenization often misses the point entirely.

The real problems sit upstream:

• Data quality

• Verification

• Permanence

• Measurement

Putting a flawed asset on a blockchain doesn’t make it credible. It just makes the flaw immutable.

Tokenization only works when:

• Data is captured from day one

• Project lifecycle is transparent

• Standards are recognised

• Double counting is structurally prevented

Infrastructure first. Tokens later.

Why Voluntary Carbon Markets Stalled — And Why They’re Recovering

The dip in voluntary carbon markets wasn’t accidental.

It came from:

• Greenwashing scandals

• Weak verification standards

• Legal risks around “carbon neutral” claims

• Fragmented registries

• Geopolitical and macro pressure

Trust collapsed.

What’s bringing the market back isn’t hype — it’s structure:

• Standardisation frameworks

• Integrity councils

• Article 6 clarity

• Tax-linked use cases

• Government-backed mechanisms

Carbon only becomes investable when it behaves like an asset — not a moral statement.

Nature Has to Become an Asset Class

This is the thesis behind Michael’s transition from banking to climate finance.

Philanthropy isn’t enough.

Good intentions don’t scale.

If protecting ecosystems requires less than 1% of global assets under management — but can’t attract it — the problem isn’t capital availability. It’s asset design.

Nature must:

• Produce predictable cash flows

• Be measurable

• Be comparable

• Be financeable

Only then does institutional capital engage at scale.

The Biggest Myth in Green Finance

The most damaging myth founders sell?

“You can do real impact with minimal effort.”

Climate finance is hard because the underlying systems are complex. Measurement is messy. Verification is expensive. Time horizons are long.

Any model that pretends otherwise is selling optics, not outcomes.

And investors know the difference.

Final Thought: Slow Capital Is Serious Capital

Green finance doesn’t need to move faster.

It needs to move correctly.

The institutions everyone loves to criticise are the same ones capable of deploying capital at planetary scale - once the infrastructure, data, and trust exist.

The work isn’t glamorous.

It’s slow, technical, and unsexy.

And that’s exactly why it matters.

Watch the full video here:

About Penomo

Penomo is a digital asset infrastructure platform specializing in tokenized energy and AI infrastructure financing.* Through tokenization technology, Penomo is streamlining financing processes, enhancing liquidity, and enabling efficient financing for the global energy transition and AI expansion.

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