Mar 25, 2009

The State of Green Investing 2009 from Sustainablebusiness.com


Many green investors lost more than most in the stock market collapse, yet they are hanging on, knowing there's a bright light at the end of the tunnel. The Powershares WilderHill Clean Energy ETF (PBW), the largest ETF in our field which had $1.7 billion in assets, dropped 75% in 2008, after surging to grand heights in the previous two years. It's been reduced to $500 million in assets, but not because investors pulled out. Founder Rob Wilder says people are holding and there's been an uptick in buying since the beginning of the year. The same is true for the clean energy international ETF (PBD) which lost 62% in value, and for everyone we spoke with that manages a green ETF or mutual fund..................

Our planet heaves a sigh of brief relief when economies are in recession. We cut fewer forests, dig up less iron ore for steel, and consume fewer resources. Worldwide, stimulus plans have been designed to re-invigorate consumption. While this may be necessary in the short run, over the not-so-long term, we've got to get off the consumption equals prosperity bandwagon. Will it happen? Certainly not in China................

The Bush Administration brought us to the precipice of uncontrollable climate change by refusing to take leadership on this most important of all issues. We now have a president that "gets it" and, in the 11 hour and 59th minute, we have a chance to hoist ourselves into the Green Revolution. It's knocking at our door and we will open it. Millions of us have been waiting our entire lives for this opening. The pent up human energy waiting to be released can't be overestimated.

The platform is in place, ready for take off. As we've written about for the past several years, a raft of Fortune 500 companies, the venture capital community, and institutional investors are all on board, having already invested heavily to position themselves for green technology as their core business. Thousands of cleantech companies are profitable, formidable businesses.

Unfortunately, it's been quite a fight to get here and it's not over yet. A Cap-and-Trade plan won't get through Congress easily, and surely the media will focus on the costs, not the opportunity.

There's no time to waste. Scientists give us seven years to make serious progress on climate change, which they say, must start by next year...........

As many have predicted, the solar industry is in for a tough 2009. It's contracting because of oversupply, downward pressure on module prices, and difficulty accessing financing. Ted Sullivan, an analyst at Lux Research, says cell and module capacity "will overshoot demand twofold in 2009" causing "a shakeout that will eliminate all but the top players" before the industry rebounds. He's quite positive in the mid-term though, expecting the industry shake-out and lower prices will spark tremendous growth - $70 billion in 2013........

On a larger level, the big question for too many years has been whether companies that make a commitment to sustainability outperform their peers. Last year, in the most difficult of economic periods, they did. In 16 out of 18 industries, companies with a commitment to sustainability were the clear leaders in the financial markets, analysts at A.T. Kearney reported. And they outperformed industry averages by a significant 15%, representing $650 million in protected market capitalization per company........

Selections from a recent Article on Green Business in Sustainablebusiness.com


Issue 61: February/ March 2009

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