Like most investors, T Boone Pickens has identified an investment strategy that will work for him. It is forward-thinking, aggressive, and the potential payoff and risk are both high. But he’s not the only one out there, looking for ways to invest in the burgeoning ‘green’ economy. Lots of individual and institutional investors are seeking to get great returns; if they can “do good” at the same time, well, that’s fine too.
The “Leading Green” Blog at the Harvard Business Review reports this week about phenomenal growth in ‘green’ investing. While financial priority for sustainability has been growing for more than two decades (CERES itself celebrates twenty years in 2009), it is reaching numbers that are really hard to ignore. Mindy Lubber, the author, cites several studies and indices that show this. Her organization, CERES, is responsible for organizing a $10 billion commitment for renewable energy from European and US investors over the next two years. Those billions are likely just the tip of the iceberg (can we still use that analogy?).
What is driving all this interest? Knowledge and opinion that climate change, energy and water scarcity – among others – are global challenges that must be met, and that there is tremendous financial opportunity in being ready to handle them.
However, not all of us are investors with millions of dollars to invest in a windmill or two hundred. Just the same, there are opportunities for small, medium and large companies to profit from facing these challenges head-on, rather than pretend they don’t exist or hope we can drill our way to energy independence.
Be proactive. Be creative. It’s not necessarily about increasing your value by inventing a better photovoltaic cell to capture sunlight, it’s also about streamlining your energy and water use, and preparing the business for those global challenges. Companies that are successful at this will be smiled upon by these same institutional investors; viewed as having strong management. Off-book intangibles like this make a company more attractive for investors.
As Ms Lubber puts it: “Warning to U.S. companies: Just because national lawmakers are dawdling on global warming, don’t think your business can dawdle, too.”
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